FOR OFFICIAL USE ONLY
Public Disclosure Authorized Report No: PAD3917
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN
IN THE AMOUNT OF €183.90 MILLION (US$200 MILLION EQUIVALENT)
Public Disclosure Authorized TO THE
REPUBLIC OF CROATIA
FOR AN
EARTHQUAKE RECOVERY AND PUBLIC HEALTH PREPAREDNESS PROJECT
June 1, 2020
Public Disclosure Authorized
Urban, Resilience and Land Global Practice Europe and Central Asia Region
Public Disclosure Authorized
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
CURRENCY EQUIVALENTS
Exchange Rate Effective: April 30 , 2020
Currency Unit = Euro ( € ) €1.00 = US$1.088 US$1.00 = €0.919
FISCAL YEAR January 1 – December 31
ABBREVIATIONS AND ACRONYMS
CBA Cost-Benefit Analysis COVID-19 Coronavirus Disease 2019 CPF Country Partnership Framework DA Designated Account DRM Disaster Risk Management EC8 Eurocode 8 ESF Environmental and Social Framework ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan ESS Environmental and Social Standards EU European Union EUSF European Union Solidarity Fund F&C Fraud and Corruption FM Financial Management GDP Gross Domestic Product GEM Global Earthquake Model GHSI Global Health Security Index GRM Grievance Redress Mechanism GRS Grievance Redress Service ICR Implementation Completion and Results Report ICU Intensive Care Unit ICWMP Infection Control and Waste Management Plan IFC International Finance Corporation IFR Interim Financial Report IHR International Health Regulations IPF Investment Project Financing ISP Implementation Support Plan M&E Monitoring and Evaluation MoCPP Ministry of Construction and Physical Planning MoF Ministry of Finance MoH Ministry of Health
MoSE Ministry of Science and Education MTR Midterm Review NPP National Procurement Procedures PDO Project Development Objective PforR Program for Results PIU Project Implementation Unit POM Project Operations Manual PPE Personal Protective Equipment PPSD Project Procurement Strategy for Development PSC Project Steering Committee RDNA Rapid Damage and Needs Assessment SEP Stakeholder Engagement Plan SOE Statement of Expenditure SPRP Strategic Preparedness and Response Program STC Short-Term Consultant STEP Systematic Tracking of Exchanges in Procurement TED Tender Electronic Daily UN United Nations VSL Value of a Statistical Life WHO World Health Organization
Regional Vice President: Anna Bjerde Country Director: Arup Banerji Regional Director: Steven N. Schonberger Country Manager: Elisabetta Capannelli Practice Manager: David N. Sislen Vica Rosario Bogaerts, Yoshini Naomi Rupasinghe, Task Team Leaders:
Zuzana Stanton-Geddes
The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
TABLE OF CONTENTS DATASHEET ...... 1 I. STRATEGIC CONTEXT ...... 6 A. Country Context ...... 6 B. Sectoral and Institutional Context ...... 7 C. Relevance to Higher Level Objectives ...... 12 II. PROJECT DESCRIPTION ...... 15 A. Project Development Objective ...... 15 B. Project Components ...... 16 C. Project Cost and Financing ...... 21 D. Project Beneficiaries ...... 22 E. Results Chain ...... 22 F. Rationale for Bank Involvement and Role of Partners ...... 23 G. Lessons Learned and Reflected in the Project Design ...... 25 III. IMPLEMENTATION ARRANGEMENTS ...... 26 A. Institutional and Implementation Arrangements ...... 26 B. Results Monitoring and Evaluation Arrangements ...... 27 C. Sustainability ...... 27 IV. PROJECT APPRAISAL SUMMARY ...... 28 A. Technical, Economic, and Financial Analysis...... 28 B. Fiduciary ...... 30 C. Legal Operational Policies ...... 32 D. Environmental and Social ...... 32 V. GRIEVANCE REDRESS SERVICES ...... 34 VI. KEY RISKS ...... 34 VII. RESULTS FRAMEWORK AND MONITORING ...... 37 ANNEX 1: Implementation Arrangements and Support Plan ...... 47 ANNEX 2: Procurement Arrangements ...... 51 ANNEX 3: Health Sector ...... 54 ANNEX 4: Education Sector ...... 56 ANNEX 5: Disaster Profile and Climate Change Screening ...... 58 ANNEX 6: Earthquake Event Description and Damage Information ...... 61 ANNEX 7: Country Map ...... 64
The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
DATASHEET
BASIC INFORMATION BASIC INFO TABLE Country(ies) Project Name
Croatia Earthquake Recovery and Public Health Preparedness Project
Environmental and Social Risk Project ID Financing Instrument Process Classification Urgent Need or Investment Project P173998 Substantial Capacity Constraints Financing (FCC)
Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s)
[ ] Performance-Based Conditions (PBCs) [ ] Small State(s)
[ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country
[ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [✓] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA)
Expected Approval Date Expected Closing Date
25-Jun-2020
Bank/IFC Collaboration
No
Proposed Development Objective(s)
The Project Development Objective (PDO) is to assist Croatia with earthquake reconstruction efforts in Zagreb and the surrounding areas, improve institutional capacity for reconstruction, and strengthen national systems for public health preparedness.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
Components
Component Name Cost (US$, millions)
Earthquake Recovery and Reconstruction 180.00
Public Health Surveillance and Preparedness 15.00
Project Management 5.00
Organizations
Borrower: Republic of Croatia Implementing Agency: Ministry of Construction and Physical Planning Ministry of Health
PROJECT FINANCING DATA (US$, Millions)
SUMMARY-NewFin1
Total Project Cost 200.00 Total Financing 200.00 of which IBRD/IDA 200.00 Financing Gap 0.00
DETAILS -NewFinEnh1
World Bank Group Financing
International Bank for Reconstruction and Development (IBRD) 200.00
Expected Disbursements (in US$, Millions)
WB Fiscal Year 2021 2022 2023 2024
Annual 13.00 33.00 70.00 84.00
Cumulative 13.00 46.00 116.00 200.00
INSTITUTIONAL DATA
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
Practice Area (Lead) Contributing Practice Areas Urban, Resilience and Land Education, Health, Nutrition & Population
Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks
SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT)
Risk Category Rating
1. Political and Governance Moderate
2. Macroeconomic High
3. Sector Strategies and Policies Substantial
4. Technical Design of Project or Program Moderate
5. Institutional Capacity for Implementation and Sustainability Substantial
6. Fiduciary Moderate
7. Environment and Social Substantial
8. Stakeholders Substantial
9. Other Moderate
10. Overall Substantial
COMPLIANCE
Policy Does the project depart from the CPF in content or in other significant respects?
[ ] Yes [✓] No
Does the project require any waivers of Bank policies?
[ ] Yes [✓] No
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
Environmental and Social Standards Relevance Given its Context at the Time of Appraisal
E & S Standards Relevance
Assessment and Management of Environmental and Social Risks and Impacts Relevant
Stakeholder Engagement and Information Disclosure Relevant
Labor and Working Conditions Relevant
Resource Efficiency and Pollution Prevention and Management Relevant
Community Health and Safety Relevant
Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant
Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources
Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities
Cultural Heritage Not Currently Relevant
Financial Intermediaries Not Currently Relevant
NOTE: For further information regarding the World Bank’s due diligence assessment of the Project’s potential environmental and social risks and impacts, please refer to the Project’s Appraisal Environmental and Social Review Summary (ESRS).
Legal Covenants
Sections and Description Loan Agreement, Schedule 2, Section I, Part A.1.a. Establish by not later than one month after Effective Date establish, and thereafter maintain at all times during the implementation of the Project, a Project Implementation Unit (PIU) 1, within the Ministry of Construction and Physical Planning, with composition, resources, terms of reference and functions acceptable to the Bank, responsible for the day-to-day implementation of Part 1 of the Project including disbursement, procurement, monitoring and evaluation, consolidated reporting, and ensuring safeguards compliance under the Project as well as procurement for works for Part 2 of the Project, as further elaborated in the Project Operations Manual.
Sections and Description Loan Agreement, Schedule 2, Section I, Part A.1.b. Establish by not later than one month after Effective Date and thereafter maintain at all times during the implementation of the Project, a PIU 2, within the Ministry of Health, with composition, resources, terms of reference and functions acceptable to the Bank, which shall be responsible for the day-to-day implementation of Part 2 of the Project including disbursement, procurement, monitoring and
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
evaluation, reporting, and ensuring safeguards compliance under the Project as further elaborated in the Project Operations Manual (POM).
Sections and Description Loan Agreement, Schedule 2, Section I, Part A.1.c. Establish by not later than three months following the Effective Date and thereafter maintain at all times during the implementation of the Project, a high-level Steering Committee, with composition, resources, terms of reference and functions acceptable to the Bank. The Steering Committee shall be responsible for providing strategic guidance, overall oversight of the Project and coordination and monitoring of the Project.
Sections and Description Loan Agreement, Schedule 2, Section I, Part B. 1. The Borrower, through the PIU-1 and PIU-2 respectively, shall carry out the Project, in accordance with POM, developed in cooperation with the participating ministries, satisfactory to the Bank, which shall include the rules, methods, guidelines, standard documents and procedures for the carrying out of the Project, including the following: (a) the detailed description of the Project activities and the institutional arrangements of the Project; (b) the detailed description of prioritization and eligibility criteria for the Project activities; (c) the Project accounting, auditing, reporting, financial, procurement and disbursement procedures; (d) the monitoring indicators for the Project; and (e) the detailed Project costs and financing.
Sections and Description Loan Agreement, Schedule 2, Section I, Part C. 1. Unless otherwise agreed with the Bank, jointly through PIU-1 and PIU-2, prepare and furnish to the Bank not later than December 1 of each year during the implementation of the Project, starting in 2020, a proposed Annual Work Plan and Budget for the next calendar year containing: (i) all activities to be carried out under the Project during that calendar year; and (ii) a proposed financing plan for expenditures required for such activities, setting forth the proposed amounts and sources of financing. The PIUs shall thereafter ensure that the Project is implemented with due diligence during said following year, in accordance with such Annual Work Plan and Budget as shall have been approved by the Bank.
Sections and Description Loan Agreement, Schedule 2, Section II. Unless otherwise agreed with the Bank, the Borrower shall: (a) not later than December 1, 2022 undertake a mid-term review of the progress of the Project, and (b) Not later than one month prior to the review referred to in paragraph (a) above, the Borrower shall furnish to the Bank for its comments a report, in such detail as the Bank shall reasonably request, on the progress of the Project and the various matters to be discussed at such review.
Conditions
Type Description Effectiveness The Additional Condition of Effectiveness consists of the following, namely that the Borrower shall adopt a Project Operations Manual under terms satisfactory to the Bank.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
I. STRATEGIC CONTEXT
A. Country Context
1. On March 22, 2020, the City of Zagreb was struck by the strongest earthquake since 1880, which severely damaged public buildings, hindering the effective delivery of health and education services and directly affecting the economy of the city and country. Zagreb is Croatia’s largest city; it is home to 800,000 inhabitants, or 20 percent of Croatia’s population, and is the economic, political, and cultural center of the country, generating about 30 percent of gross domestic product (GDP). Within Zagreb, the old town is an important economic asset, serving as a key tourist attraction in a country for which tourism represents about 20 percent of GDP. The old town was particularly affected by the earthquake, given that most of its buildings were constructed before seismic provisions were included in the country’s building code.
2. The Government is grappling with the need to conduct immediate repair works to protect public safety. Based on the number of property inspection requests received to date, approximately 45,000 people could be living in potentially damaged buildings, and about 827 buildings are considered severely damaged and deemed unusable. Estimates of the cost of reconstruction vary widely, with official projections in the range of €11 billion, and efforts are under way to better quantify the total impact. Due to the prevalence of relatively obsolete heating systems, approximately 30,000 people and businesses were left without hot water and heating. In addition, damage to exterior elements of a number of buildings, especially chimneys, has created a high risk of falling debris, endangering both lives and the resumption of economic activities.
3. The earthquake has affected the delivery of critical health services by causing significant damage to public health capabilities and hospitals critical to both managing the current coronavirus disease 2019 (COVID-19) crisis and the health system overall. According to an assessment by the University of Zagreb, 137 health facilities were damaged by the earthquake. Several hospitals that previously had high occupancy rates suffered substantial structural damage, forcing the evacuation of patients. Restoring health system capacity for pandemic preparedness and response is a critical priority for the country. The rehabilitation of damaged buildings is important to ensure that the health system capacity is restored, and that Croatia is prepared to meet its national health care needs, including for future pandemics and natural disasters. For example, the Croatian Institute of Public Health, which provides critical public health capabilities—including for managing pandemic events such as the current COVID-19 outbreak or any future waves of the same—was damaged by the earthquake, causing a temporary disruption in its services.
4. Similarly, the earthquake has had a significant impact on the delivery of education services. According to an assessment by the University of Zagreb, 232 education facilities were damaged. Fortunately, when the earthquake hit, all institutions were closed, and as a result, no students were injured. Nonetheless, the event rendered many buildings unsafe for future use. As the Ministry of Science and Education (MoSE) gradually reopens education facilities following their closure in March, because of the impact of the earthquake, all facilities cannot be reopened. Approximately 10,000 students (7 percent of all students in Zagreb and the affected surrounding areas) will not able to return to school due to damage to education facilities from the earthquake.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
5. The earthquake took place 11 days after the World Health Organization (WHO) declared COVID- 19 to be a pandemic, a crisis that has stressed both the health system and public finances, hindering earthquake recovery. Following the WHO declaration, the Government put in place increasingly comprehensive measures culminating in a nationwide lockdown on March 18, 2020, four days before the earthquake struck. While the Government was proactive in responding to the COVID-19 outbreak, sustained attention and effort are required to ensure that the country can manage resurgent waves of the epidemic. Maintaining vigilance against later waves of COVID-19 will require additional financial resources and technical expertise to develop and maintain a robust monitoring and detection system. These measures depend on a functional health system with fully equipped and operational facilities which requires rapid and efficient post-earthquake recovery and reconstruction.
6. In confronting its multifaceted emergencies, Croatia is likely to experience a prolonged recession in 2020. COVID-19 mitigation measures to reduce the spread of the virus have dramatically slowed economic activity, disrupting domestic and global supply chains and tourism activities and significantly reducing local employment and output. These vulnerabilities have been compounded by the earthquake. Initial World Bank estimates indicate that the pandemic may reduce Croatia’s GDP by 9.3 percent in 2020. In response to the economic downturn, the Government has prepared an intervention package worth about 15 percent of GDP. The package includes, among others, waiving and deferral of tax payments, job protection measures in the form of wage subsidies, and a moratorium on repayment of loans to development and commercial banks. Together with the effects of the sharp drop in economic activity, the intervention package is likely to result in a fiscal deficit of 10 percent of GDP and a reversal of the public debt trajectory, which could reach 90 percent of GDP by the end of 2020. The dual emergency, in the context of Croatia’s dependency on tourism, has made it challenging to shoulder the cost of post- disaster recovery and reconstruction.
7. The current situation poses a risk to the country’s recent institutional and development gains, achieved in no small part due to the Government fiscal prudence of the last four years. Croatia finds itself with greater challenges to achieve the rapid institutional transformation it needs, jeopardizing the path toward IBRD graduation envisaged in the FY19–FY24 Country Partnership Framework (CPF). The two shocks have also revealed that further work is needed around strengthening the institutions required for resilience and response to future shocks. This operation aims to support Zagreb’s reconstruction to rapidly restore essential public services, equally importantly, it aims to strengthen the institutional capacity of the national authorities to respond to future events. The March earthquake exposed the need for better institutions and stronger stakeholder coordination across line ministries and jurisdictions, that are fundamental to address the complex nature of reconstruction.
B. Sectoral and Institutional Context
Disaster Risk Management and Resilience
8. Croatia is exposed to a range of natural hazards, including earthquakes, floods, droughts, and wildfires, which can result in significant disruption of economic and social functions. Between 1996 and 2017, there were 26 recorded disasters in Croatia.1 Disaster risks in Croatia are growing due to increasing urbanization and climate change, as well as land degradation caused by deforestation and overgrazing.
1 EM-DAT: The Emergency Events Database, Université Catholique de Louvain (UCL)–CRED, D. Guha-Sapir, Brussels, Belgium, www.em-dat.be.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
The country, and the region, face seismic risks; for example, the 1979 Dubrovnik earthquake affected about 1,000 buildings. Before that, the 1880 Great Zagreb earthquake caused the destruction of 13 percent of buildings and affected virtually every building in Zagreb. Floods, extreme heat, droughts, and fires also occur frequently in Croatia, which are expected to be exacerbated by climate change impacts. The most recent major event took place in March 2014, when excess rainfall led to widespread flooding in Croatia, Bosnia and Herzegovina, and Serbia, causing total damages of €340 billion. A more detailed analysis of the climate and disaster risks in Croatia can be found in annex 5.
9. While Croatia has taken significant steps to build resilience to floods by investing in forecasting, early warning, and flood protection, earthquakes have received considerably less attention, and the Government has put in place relatively few institutional and technical systems to manage seismic risks. Earthquakes are comparatively rare but they pose a considerable risk to Croatia, especially given the number of buildings in the country that were constructed before modern building codes were instituted. Before 1964, buildings were constructed with little consideration for seismic shaking—and about one- third of the existing building stock dates from this period. Despite introducing a seismic code in 1964 and upgrading it over the next 40 years until it reached the modern Eurocode 8 (EC8) standard,2 Croatia has fallen short in comprehensively implementing and enforcing the codes. The share of existing buildings that were constructed to code is unclear, and the upgrading of older buildings generally does not adhere to any code. Despite the high level of risk posed by these older buildings, far greater effort is needed to meaningfully reduce risk, including building greater technical capacity to follow EC8 for new construction. Standards and guidelines for incorporating seismic resilience into building upgrades (rather than new construction) are nonexistent, and there is a need to strengthen institutional capacity to enforce code compliance.
10. The Government has undertaken a multipronged approach to the earthquake, beginning with the prioritization of efforts to address urgent needs (debris removal and public safety measures) and assess the scope of damages. Immediately following the earthquake, the Government prioritized urgent life-safety measures and initiated a Rapid Damage and Needs Assessment (RDNA). The Government has allocated approximately US$20 million for the removal of elements of damaged buildings that could endanger human life or health, including the repair and replacement of chimneys, gable walls, and elevators. Furthermore, with support from the World Bank, the Government is conducting an RDNA to quantify the financial impact of the earthquake. This assessment aims to establish the evidence base to set priorities for a national reconstruction program. While the national reconstruction program is being developed, the Government has prioritized the rehabilitation and reconstruction of damaged health and education facilities (hospitals, health centers, research labs, kindergartens, and primary and secondary schools) to ensure that the affected population regains access to critical health and education services and critical activities related to public health preparedness can resume as quickly as possible. The proposed Project constitutes a small but catalytic element of the broader effort to address damaged service delivery infrastructure, while broader efforts to reopen businesses and address damage to cultural heritage and public sector buildings continue in parallel.
2 Novak, M., J. Atalic, M. Uros, S. Prevolnik, and M. Nastev. “Seismic Risk Reduction in Croatia: Mitigating the Challenges and Grasping the Opportunities.” Paper presented at Scientific Symposium Future Trends in Civil Engineering, Zagreb, Croatia, October 17, 2019.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
11. The Government responded quickly and decisively immediately after the earthquake, but the challenges of reconstruction require a robust institutional response. Despite a well-defined institutional and legislative framework for disaster risk management (DRM),3 the earthquake has revealed the need to put in place mechanisms and policies to allow for a coordinated and effective reconstruction approach across Government agencies. The existing legislative framework does not allow a whole-of-government response in the aftermath of disasters, based on the activation of a pre-agreed set of protocols and policies for decision-making and execution of recovery and reconstruction activities, based on a clear strategy. The multisectoral nature of the damages requires a level of coordination and delegation of functional responsibilities, specifically tailored to a post-disaster situation.
12. To complement the urgent efforts at assessing the damage, reducing imminent risk to human life, and prioritizing service continuity in the most critical sectors, the Government is in the process of putting in place an institutional framework for the reconstruction effort, beginning with a proposed legal instrument to support coordination across agencies. The Government has tasked the Ministry of Construction and Physical Planning (MoCPP) to lead the multi-stakeholder reconstruction process. They have done so, in part, through the preparation of a draft Law on Reconstruction of Damaged Buildings in Zagreb and the Surrounding Area, currently in draft, which aims to improve institutional coordination and enhance financial and accountability measures. To improve accountability, the Government intends to launch an online portal to transparently monitor reconstruction activities in real time, monitoring both costs and physical progress. The provisions in the draft law are expected to be limited to the reconstruction of infrastructure damaged by the March 22 earthquake, and thus broader reforms are needed to develop adequate institutional prevention and preparedness. The draft law is currently in public consultation and will be presented for approval once a new parliament is in place in Croatia and, if adopted, is expected to facilitate the implementation of the Project.
13. To catalyze adequate funding for reconstruction, the Government is focused on the mobilization of external funds, which would complement the proposed Project and likely leverage the mechanisms for institutional coordination being supported by the operation. The ongoing RDNA will serve as the reconstruction road map and the basis of raising additional funds from development partners. The World Bank is committed to working closely with the Government to catalyze the necessary additional financial support and, as funds are identified, they will be informed by the work under the Project and the needs assessment carried out with the support of the World Bank. To encourage development partner participation, the World Bank is providing technical and operational support to the Government’s coordination efforts, which will demonstrate transparency while delivering early results and proving strong monitoring capabilities. The Government will rely on limited resources provided by the European Union Solidarity Fund (EUSF) to cover early recovery financing gaps caused by major disasters.4 In the
3 The Protection and Rescue Law was adopted in 2004 and amended in 2007 and 2009. It was in force until 2015 when it was abolished and superseded by the Law on the Civil Protection System (adopted in 2015, amended in 2018, with latest amendment in 2020, which became effective in March 2020). The Civil Protection Headquarters is an operational body activated after disasters; its composition depends on the type of incident. Depending on the needs, the Civil Protection Headquarters can be formed at the national, regional, and local level. This setup has enabled the country to move quickly and provide a well-coordinated response to the COVID-19 pandemic. 4 The need for resources is compounded by the absence of a comprehensive strategy for disaster risk financing in Croatia, including risk transfer (insurance) instruments. The absence of a robust disaster risk financing and disaster insurance market has made the need for development partners to support Croatia’s response more critical; limited post-disaster budget reserves, a lack of access to significant contingent lines of credit, and few options for catastrophic insurance in the Croatian market are important policy areas to be considered in the medium term.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
past, these resources have proved insufficient to address emergencies5 though significant additional resources are now being made available to Croatia from European Union (EU) funds to support the economic impacts of the COVID-19 crisis. In addition, the period between the disaster event and EUSF payment can be lengthy—for Croatia, it averaged over 14 months between 2003 and 2016.6 Given the multibillion dollar cost of reconstruction in response to the March 2020 earthquake, additional external resources will be critical.
Health
14. The 2019 Global Health Security Index (GHSI)7 highlighted that investments are needed to strengthen Croatia’s institutional capacity for emergency preparedness. As shown in figure 1, Croatia’s overall rating was favorable, ranking 38 out of 195 countries. However, the overall index score of 53.3, out of 100, indicates that much more can be done to prepare for future infectious disease outbreaks. For example, while the detection score was high, the earthquake has damaged the Croatian Public Health Institute and disrupted its functionality. In addition, emergency response capacity was assessed as being lower than average, with weaker scores in links between public health and security authorities (0 out of 100), exercising response plans (0 out of 100), and emergency response operation (33.3 out of 100). Overall, while Croatia has a strong foundation in key areas—and this, in part, helps explain Croatia’s deft management of the first wave of the 2019–2020 COVID-19 outbreak, these scores also point toward areas that can be improved.
Figure 1. Croatia’s Scores on the 2019 GHSI
Source: Global Heath Security Index. 2019. 2019 GHS Index Country Profile for Croatia.
15. The 2019–2020 outbreak of COVID-19 in Croatia has highlighted the importance of investing in public health preparedness8 for future outbreaks and building the institutional capacity of health
5 Between 2002 and 2018, Croatia received five payments totaling only €23 million from the EUSF. 6 European Commission. 2019. “Evaluation of the European Union Solidarity Fund 2002–2017: SWD (2019) 186 Final.” Commission Staff Working Document. 7 Global Heath Security Index. 2019. 2019 GHS Index Country Profile for Croatia. https://www.ghsindex.org/country/croatia/. 8 Public health preparedness is the capability of the public health and health care systems, communities, and individuals to prevent, protect against, quickly respond to, and recover from health emergencies, particularly those whose scale, timing, or unpredictability threatens to overwhelm routine capabilities. In the context of this project, the national system for public health preparedness refers to the network and functionality of institutions whose primary responsibility is to detect and manage outbreaks of infectious diseases. This includes surveillance, testing, and emergency response capabilities. However, given that unknown associations can drive outbreaks, the public health preparedness also entails understanding how environmental, social, behavioral and genetic risk factors play a role in public health outbreaks.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
agencies. On March 11, 2020, the WHO declared a global pandemic due to the spread of COVID-19, which was first identified in Wuhan, China, in November 2019. Croatia’s first COVID-19 patient was registered on February 25, 2020. As early as January 23, 2020, the Government began implementing a series of measures to address the health impact of the virus including the publication and dissemination of multilingual public health materials, the closure of education facilities, prohibitions on large gatherings, the deferral of elective health care, and sheltering of at-risk populations, such as the elderly. On February 25, 2020, an emergency response unit was established at the Civil Protection Headquarters, under the chairmanship of the prime minister, to bring together all relevant authorities and coordinate the cross- ministry response. As of May 26, Croatia had 2,244 confirmed COVID-19 cases and, unfortunately, 101 fatalities. While the outbreak has been contained in the short term, the risk posed by infectious diseases has not yet been mitigated.
16. A focus on public health preparedness is rooted in the Government’s recognition that there is a need to prepare for a new normal, where health agencies will need to play a greater role in adaptive emergency response. Despite Croatia’s proximity to several epicenters in the European outbreak, its experience of COVID-19 has been less acute. Nevertheless, the WHO and other epidemiological experts anticipate continued transmission and waves of the virus in the next 12–18 months. The peaks are likely to be driven by winter pressures on health systems, the loosening of social distancing measures, and the return of tourists to the country in the summer of 2020. Restoring and strengthening the physical and functional capacity of core public health institutions and the wider health system is critical for ensuring that that future waves of infectious disease can be well managed. Relevant health agencies include the Ministry of Health (MoH), the Croatian Institute of Emergency Medicine, and the Croatian Institute of Public Health. In addition, other agencies such as the Croatian Health Insurance Fund and regional public health institutes and facilities have a role to play in the improved detection and management of public health outbreaks. Mitigating the number of lives lost and being well positioned to restart economic activity depend on a reduction in disease transmission, strong health systems, and adequate public health capacity, particularly when the emergency period is not short term or definitive.
17. The World Bank stands to play a critical role in the provision of medium-term preparedness support and this focus is aligned and complementary to the actions of other development partners, who are focused on immediate response. The Government has received a range of support from bilateral and multilateral organizations. For example, approximately €47 million of the Operational Program on Competitiveness and Cohesion funds were used to procure medical equipment for the immediate COVID- 19 response. The Council of Europe Development Bank has also provided fast-track, flexible, budget support for COVID-19; this will focus on immediate needs in pharmaceutical procurement, protective equipment, and routine care costs. In parallel, other partners such as United Nations Children’s Fund and Norway are supporting Croatia through grants on a bilateral basis for limited targeted interventions. Nevertheless, needs outweigh available support and this Project focuses on a specific, complementary gap for the medium-term public health preparedness.
Education
18. COVID-19 has had a profound impact on the education sector, and the March 22 earthquake has put additional stress on the sector in Zagreb and surrounding areas. On March 16, all education institutions in the country were closed, and students at all levels were asked to learn from home. Because of recent investments in digitizing the sector, which focused in part on improving students’ and teachers’ digital competence and on equipping education facilities, the MoSE was able to successfully launch
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
distance learning for primary and secondary students in only two weeks and was also able to support efforts by higher education institutions to move their lectures online.
19. Distance learning was slated to end gradually, with students in grades 1–4 returning to education facilities in Zagreb on May 11, but the earthquake has had a significant impact on plans to reopen Zagreb schools. According to an assessment by the University of Zagreb, 232 education and research facilities were damaged within the City of Zagreb, Zagreb County, and Krapinsko-Zagorska County (which have a total of 361 elementary and 102 secondary schools). In terms of the biggest disruptions, 4 schools were totally destroyed and another 17 need major structural repairs to be usable again. Fortunately, when the earthquake hit, all institutions were closed, and as a result, no students were injured. Nonetheless, the event rendered many buildings unsafe for future use. The MoSE’s plan to gradually reopen education facilities in May has been derailed by the impact of the earthquake and not all schools will be able to reopen. Overall, there are 142,000 primary and secondary students enrolled in schools in the three counties that suffered earthquake damage. Approximately 10,000 of these students are enrolled in the 21 schools that have been either totally destroyed or significantly damaged by the earthquake.
20. In addition to elementary and secondary schools, a large number of other education facilities, including kindergartens, tertiary education institutions, and public research institutes, suffered damage. It is particularly worrisome that the earthquake damaged 28 kindergartens, 4 of them severely, given that Croatia has low rates of kindergarten attendance, in large part due to the lack of available spaces in such institutions. According to the European Commission’s Education and Training Monitor (2019), in 2017, 82.8 percent of children between the ages of 4 and compulsory education participated in early childhood and care, compared to the EU average of 95.4 percent. Higher education and research sectors were also profoundly affected by the earthquake: 50 higher education buildings and 23 research institutes were damaged. The University of Zagreb, which is among the most severely affected institutions, has over 60,000 students, and many of them have been directly affected by the earthquake.
21. Capital investments in the damaged education facilities are needed to allow students to return from distance learning, but investment choices must be made carefully to avoid rebuilding facilities that may no longer be needed, given smaller student populations. The total cost of repairing the 232 educational facilities is still being estimated, but a first estimate suggests that simply focusing on the 21 most damaged education facilities could cost as much as €50 million. One complication in estimating rehabilitation and reconstruction costs is that some of the facilities may not need to be rebuilt to their current size, given the dwindling student numbers.
C. Relevance to Higher Level Objectives
22. The proposed Project will help Croatia strengthen resilience to disasters and public health emergencies—essential to support the World Bank’s twin goals of ending extreme poverty and promoting shared prosperity—through support to the development of robust institutions, response capability, and recovery capacity. Disasters and emergencies undermine development gains, diminish economic growth, and trap vulnerable groups in poverty. Research suggests that, the poor are less able to cope with and recover from shocks than better-off peers and that shocks may have lasting
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impacts on their health and education.9 Early findings from a forthcoming World Bank report on the poverty impacts of earthquake and floods in Croatia confirm that the poorest 20 percent are disproportionately affected by disasters. Income losses resulting from a 200-year earthquake event could push some 50,100 individuals into income poverty (1.2 percent of the country’s population) and displace some 110,000 individuals from the middle-class income level (corresponding to a 4.4 percent decrease).
23. The proposed Project is aligned with health-related targets of the Sustainable Development Goals, especially target 3.8 and target 3.d.10 Country progress on pandemic preparedness and response capacity (‘health security’) is monitored by the World Bank and WHO as part of the Universal Health Coverage Index.11 The Project is also aligned with the World Bank’s support for national plans and global commitments to strengthen pandemic preparedness through three key actions related to preparedness: (a) improving national preparedness plans, including organizational structure of the Government; (b) promoting adherence to the International Health Regulations (IHR); and (c) utilizing international frameworks for monitoring and evaluation (M&E) of the IHR. The Project complements both World Bank Group and development partner investments in health systems strengthening, disease control and surveillance, efforts to change individual and institutional behavior, and citizen engagement.
24. The proposed Project aims to address critical institutional deficiencies exposed by the earthquake and compounded by the pandemic. These deficiencies threaten to jeopardize the overarching objective of the current CPF of putting the country on a sustainable path toward IBRD graduation by helping to create robust institutions.12 The Project aims to reduce institutional gaps by strengthening the Government’s ability to respond to crises through better coordination and the implementation of new policies and emergency procedures. This includes (a) putting in place the institutional and coordination capacity for planning and execution of resilient rehabilitation and reconstruction of earthquake-damaged public buildings, (b) facilitating the rapid restoration of critical health and education services following the March 2020 earthquake, and (c) strengthening core public health preparedness and health system capabilities for the prevention and effective management of future infectious disease outbreaks. In doing so, the Project is expected to improve the country’s ability to respond to future natural disasters and to reduce recently achieved development gains. Additionally, the Project meets the following criteria outlined in the CPF: (a) provide innovative solutions that benefit the marginalized and bottom 40 groups; (b) improve the Government’s capacity to leverage additional resources, including access to and efficient utilization of EU funds; and (c) contribute to regional and global public goods. Table 1 summarizes how this proposed operation meets the CPF filters.
9 Hallegatte, Stephane, Adrien Vogt-Schilb, Mook Bangalore, and Julie Rozenberg. 2017. Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters. Climate Change and Development Series, Washington, DC: World Bank. 10 Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all. Target 3.d: Strengthen the capacity of all countries, in particular developing countries, for early warning, risk reduction and management of national and global health risks. 11 World Health Organization. “Monitoring Universal Health Coverage.” https://www.who.int/healthinfo/universal_health_coverage/en/. 12 World Bank. 2019. Croatia: Country Partnership Framework for the Period of FY19-FY24. Report number 130706. Washington, DC: World Bank.
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Table 1. Applicability of CPF Filters to the Proposed Operation Croatia CPF Filters How Filters Are Met by the Proposed Operation Strengthening The success of reconstruction programs is often defined by the effectiveness of institutions coordinated leadership and management. Recognizing that coordination across Government ministries is often complex and suboptimal, the Project is designed to support the Government in responding in a streamlined fashion. The Project will help build the capacity to guide the efficient execution of interministerial and multi- jurisdictional activities. This will be done through integrated implementation arrangements designed under the Project, which actively engage relevant stakeholders and regularly report progress and issues to senior leadership which will reinforce the robust coordination required to respond to this multifaceted crisis. The Project will also strengthen core public health and health system capabilities, which are critical to effective emergency response. Providing innovative The Project will support the rehabilitation of buildings which provide critical public solutions that benefit services (health and education) for all of Zagreb’s citizens. Investments will be the marginalized, poor, consistent with sector goals to improve service quality in a sustainable manner and and vulnerable will be based on the ‘building-back-better’ approach to increase resilience to shocks, improve accessibility of facilities, and enhance the Government’s ability to meet its service delivery objectives. The Project will also build the Government’s capacity to provide targeted public resources—through a financial instrument to support private housing reconstruction—in a manner which addresses needs of those with limited resources. Catalyzing other sources In parallel to the Project, the World Bank is supporting the RDNA, which will help of funding develop a prioritized and sequenced reconstruction plan. This reconstruction plan will provide the basis to identify support options from the European Commission, through the EUSF and beyond, and other partners such as the Council of Europe Bank, the European Investment Bank, and the European Bank for Reconstruction and Development. The World Bank, in coordination with the authorities, has initiated a dialogue with these partners to discuss the potential of financing a portion of the needs identified in the RDNA after it is completed in June 2020. In addition, the Project will build a foundation for greater attention to reducing earthquake risk, as Croatia plans future operational program activities using EU cohesion funds.a Contributing to regional By rebuilding Croatia’s core public health capabilities, the World Bank stands to play and global public goods an important role in limiting the impact of future waves of infectious diseases, including COVID-19, thus providing a key global public good. The physical restoration of epidemiological and health care facilities required for monitoring and treatment is critical to Croatia’s ability to manage the outbreak. Given Croatia’s reliance on tourism and proximity to European epicenters, the ability to effectively manage infectious diseases brings positive externalities across the region and in the context of a pandemic constitutes a global public good. Without prompt support from the World Bank, and the needs assessment and investments proposed by this Project, the Government might face delays and challenges in controlling future outbreaks, which could have significant consequences in terms of lives lost and the length of the economic downturn. Note: a. Under the EU’s Operational Program on Competitiveness and Cohesion, in the current perspective (2014– 2020), Croatia has allocated €245 million to climate change and risk management priority axis.
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II. PROJECT DESCRIPTION
A. Project Development Objective
PDO Statement
25. The Project Development Objective (PDO) is to assist Croatia with earthquake reconstruction efforts in Zagreb and the surrounding areas, improve institutional capacity for reconstruction, and strengthen national systems for public health preparedness.
PDO Level Indicators
26. The key indicators for tracking progress toward the PDO are the following. Targets will be monitored for their realism during implementation and suitably adjusted as needed.
• Buildings which have benefitted from debris removal and/or repair (percentage)
• Rehabilitated or reconstructed health and education buildings with restored operational capacity and higher seismic performance (percentage)13
• Croatia has developed policy options for the design of a financial support program for housing reconstruction (yes/no)
• Reported suspected cases of a selected health condition reported and investigated per approved protocol, disaggregated by gender (percentage).
13 ‘Rehabilitation’ is defined as structural strengthening of existing buildings to meet a higher seismic performance and ‘reconstruction’ is defined as demolishment of existing buildings and subsequent construction of new buildings in replacement.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
B. Project Components
27. The Project will have the components and subcomponents shown in table 2.
Table 2. Overview of Project Components
Component 1: Earthquake Recovery and Reconstruction • Subcomponent 1.1: Immediate Public Safety Interventions • Subcomponent 1.2: Rehabilitation and Reconstruction of Health and Education Facilities • Subcomponent 1.3: Housing Reconstruction Support Program Design Component 2: Public Health Surveillance and Preparedness • Subcomponent 2.1: Case management and Surveillance • Subcomponent 2.2: Public Health Preparedness Component 3: Project Management
Component 1: Earthquake Recovery and Reconstruction (US$180 million)
Subcomponent 1.1: Immediate Public Safety Interventions (US$9 million)
28. Immediate recovery activities are targeted to increase public safety by making urgent repairs to damaged buildings, focusing largely on removing debris and reducing the likelihood of debris falling on pedestrians and city dwellers. Interventions include removal of debris and of damaged roofs and chimneys, along with minor repairs to nonstructural elements of communal parts of buildings. While these interventions will ensure life safety and the use of damaged buildings in the short term, they are not geared at improving the structural integrity of damaged buildings. Any buildings that require immediate repairs but that are additionally determined to be at risk of partial or total collapse due to structural damage will be excluded from this subcomponent.
Subcomponent 1.2: Rehabilitation and Reconstruction of Health and Education Facilities (US$170 million)14
29. This subcomponent will finance a detailed engineering assessment of selected damaged health and education buildings, followed by the rehabilitation and reconstruction15 of priority buildings to restore the country’s ability to provide critical public health and education services.
30. Physical interventions will include rehabilitation of structures, demolition of unsafe buildings, and the in situ reconstruction of new buildings to replace damaged buildings. The interventions will be in accordance with EC8 requirements for new construction and, for rehabilitation works, with safety provisions under the Law on Reconstruction of Damaged Buildings in Zagreb and the Surrounding Area. Combined, these standards will enhance the current functional safety performance of these buildings. The works will be complemented by functional upgrades and climate-resilient designs, including improved insulation to cope with extreme temperature and energy efficiency to address also climate-related risks. Functional upgrades will be gender informed, including adequate considerations for personal safety and
14 Facility refers to a building, part of a building, or area connected to the building that is used for health and/or education purposes in Zagreb and surrounding area and is listed in further detail in the Project Operations Manual (POM). 15 ‘Rehabilitation’ is defined as structural strengthening of existing buildings to meet a higher seismic performance; ‘reconstruction’ is defined as demolishment of existing buildings and subsequent construction of new buildings in replacement.
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hygiene, and support those with disabilities to ensure universal accessibility, considering feedback from public consultations. Energy efficiency measures, such as proper insulation, energy efficient windows, LED lights, white roofs, and solar panels, will help reduce the climate footprint of health and education facilities and reduce operating costs for the Government. Project interventions will also include equipment replacement and upgrades when necessary.
31. An initial assessment of damaged health and education facilities undertaken by the University of Zagreb, Faculty of Civil Engineering, identified over 247 damaged facilities, of which 43 suffered moderate to severe damage. This has been completed by the preparation of the RDNA. The selection will be based on eligibility and prioritization criteria aimed to ensure that the most critical infrastructure is supported under the Project and that facilities financed by the Project are consistent with the health and education sectoral priorities and any future investment plans to improve seismic performance. Key eligibility and prioritization criteria include (a) damage levels, to ensure that structures made most vulnerable by the earthquake are prioritized to ensure life safety; (b) sectoral relevance, to focus investments on sector outcome objectives and service delivery needs; (c) technical and financial eligibility, to ensure that repair and rehabilitation of partially damaged buildings, as opposed to new construction, are duly considered; and (d) environmental and social risks, to ensure that investments do not cause significant unforeseen environmental or social impacts. Detailed selection criteria will be included in the POM.
32. Health sector investments. The proposed Project will support investments to respond to critical preparedness needs while considering the importance of improving the efficiency and quality of health care services. To balance these immediate and longer-term strategic needs, investment selection will be guided by the criteria in table 3. The Project will not seek to create excess secondary and tertiary capacity, such as by increasing the number of permanent acute beds. Rather, it will seek to support the restoration of critical services through the financing of the reconstruction of investments that benefit health outcomes and improve service delivery, in accordance with sector priorities.
Table 3. Criteria to Guide Reconstruction Priorities in the Health Sector Criterion Description Improving health outcomes The proposed investment has the capacity to improve patient experience and/or health outcomes. Improving service delivery The proposed investment considers the efficient organization of service and organization delivery, and design elements include measures to improve access and/or reduce costs. Easing health financing The proposed investment does not permanently add new acute care beds challenges beyond previous levels of activity.
33. Education sector investments. This Project will support investments to ensure continuity of education services provided at primary and secondary levels through the reconstruction of earthquake- damaged buildings. Additionally, the Project will consider supporting the rehabilitation of some pre- primary and higher education institutions that are of strategic importance to the education sector as well as the country and the health sector. To balance immediate and longer-term strategic needs, investment selection will be guided by the criteria in table 4.
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Table 4. Criteria to Guide Reconstruction Priorities in the Education Sector Criterion Description Criticality of restoring building The proposed investment considers the role of the education facilitya in the to resume education services overall network and the proximity of nearby facilities to accommodate additional students. Note: a. Facility includes preschool institutions, primary and secondary schools, higher education facilities, pupil and student housing, and research institutes.
Subcomponent 1.3: Housing Reconstruction Support Program Design (US$1 million)
34. This subcomponent aims to design a financial support program for reconstruction of private housing. The objective is to support the establishment of a medium-term housing resilience program that uses a matching grant system and loan-based financial mechanism to provide direct support to households. Options for eligibility criteria, funds flow, and a governance scheme, as well as social and environmental safeguards, disaster and climate change risks, and energy efficiency standards/aspects will be considered. The options to be considered will be grounded in existing national laws and policies and the World Bank’s Environmental and Social Framework (ESF) and will include, but not be limited to, considerations related to gender, citizen engagement, vulnerable groups, and financial sustainability, while drawing on international good practice. This subcomponent will also provide resources to raise awareness among partners and concessional lenders to attract external financing to leverage the impact of the program—an aspect that is just as important as the design and mechanics of the financial support program. While the Project itself will not provide financing for this mechanism directly, the aim is to create a vehicle that will attract future funding from both public and commercial lenders, including, potentially, the International Finance Corporation (IFC).
Component 2: Public Health Surveillance and Preparedness, US$15 million
Subcomponent 2.1: Case management and Surveillance (US$8.2 million)16
35. While the Croatian authorities have managed the current pandemic well, there is a clear recognition of the need to strengthen the Government’s overall preparedness for future events. This subcomponent will focus on case detection and confirmation, contact tracing, recording and reporting capabilities, and surveillance to strengthen the Government’s capacity to promptly and proactively manage future outbreaks, with a focus on the Croatian Institute of Public Health. This subcomponent would (a) strengthen disease surveillance systems and equipment, public health laboratories, and epidemiological capacity for early detection and confirmation of cases; (b) support the repair, rehabilitation, and reconstruction of public health laboratories; (c) support the development of systems for active contact tracing and reporting of new cases; and (d) support epidemiological and laboratory investigation of selected health conditions.
Subcomponent 2.2: Public Health Preparedness (US$6.8 million)
36. This subcomponent will support the health care system for preparedness planning to provide optimal medical care, maintain essential community services, and minimize risks for patients and health personnel, in part by training health facilities’ staff and frontline workers on risk mitigation measures and
16 These activities will need to consider the General Data Protection Regulation 2016/679 on data protection and privacy.
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providing them with supplies and equipment for future emergencies. This subcomponent will include (a) providing emergency medical vehicles, medical and laboratory equipment and supplies, medicines, technical assistance and training to public health officials and health care workers, all to strengthen capacity of the health system to respond to public health outbreaks; (b) providing personal protective equipment (PPE) and gear for health care workers and public health rapid response personnel (such as relevant medical specialists, veterinarians, and entomologists); (c) providing equipment and supplies for telemedicine to monitor and support patients to support the health system as needed; (d) repurposing and equipping selected health care facilities to deliver critical medical services and cope with increased demand for services in a public health outbreak; (e) supporting institutional and organizational restructuring of facilities for managing public health emergencies and training of health care staff accordingly, including sector-wide planning activities for medium- and long-term needs.
Component 3: Project Management (US$5 million)
37. This component will strengthen the technical and institutional capacity of the project implementing agencies, including project management, procurement, financial management (FM) activities, technical audits, compliance monitoring of construction activities, oversight of compliance with social and environmental standards, oversight of compliance with social inclusion targets, M&E activities, and grievance redress mechanisms (GRMs). This subcomponent would also finance consultancy services to build the technical capacity of the MoCPP and the other key agencies involved, including MoH and MoSE.
Cross-Cutting Themes
38. Climate change. A screening of the proposed Project for short- and long-term climate change and disaster risks was undertaken using the World Bank Climate and Disaster Risk Screening Tool, with details in annex 5. The Project will contribute to national climate change objectives and World Bank climate targets by generating climate co-benefits in adaptation and mitigation. These co-benefits will be achieved by ensuring that all civil works financed under the Project (subcomponent 1.2 and subcomponent 2.1) incorporate design measures to reduce energy consumption, and by ensuring that rehabilitated and reconstructed health and education facilities are resilient to hydrometeorological and climate risks, such as flooding and other extreme weather events.
39. Gender. The proposed Project design draws on findings and recommendations of the World Bank Croatia Country Gender Assessment (2019),17 Croatia Systematic Country Diagnostic,18 and global knowledge related to integrating gender concerns in a post-disaster context.19 The Country Gender Assessment found that despite significant progress made in achieving gender equality in many areas, gaps persist in Croatia, especially in access to economic opportunities and benefits, due to gender norms and institutional barriers, among others. There is a disproportionate poverty rate in households economically supported primarily by women. Women make up large parts of the health workforce and as such are on the frontlines of emergency public health response. Global experience suggests that women are
17 Morrica, Valerie, Tara Sharafudheen, Paul Andres Corral Rodas, Ursula Casabonne, and Zuzana Boehmova. 2019. Investing in Opportunities for All Croatia: Country Gender Assessment. Washington, DC: World Bank Group. 18 World Bank. 2018. The Republic of Croatia Systematic Country Diagnostic. Washington, DC: World Bank Group. 19 Rex, Helene Carlsson, and Zoe Trohanis. 2012. “Making Women’s Voices Count: Integrating Gender Issues in Disaster Risk Management—Overview and Resources for Guidance Notes.” World Bank, Washington, DC.
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disproportionally affected by external shocks, including disasters and health emergencies, constrained by their traditional role of primary caregivers in their families. Further, women are at risk of experiencing increased levels of gender-related violence, which is traditionally under-reported in Croatia20 and the United Nations (UN) has projected that, globally, the outbreak of COVID-19 could see an increase in gender-related violence.21
40. Actions. In line with the Project’s focus on the restoration of critical service delivery and improvements in the national public health preparedness system, the Project seeks to integrate mechanisms to promote equal access and feedback from diverse population groups and to improve data collection and awareness to gender-specific needs. Participatory methods will be used for consultations, such as community scorecards or online tools to support two-way information flow to ensure that female voices are incorporated into the design of public works. To encourage female participation, consultations will be scheduled at times and places convenient for women, and outreach will be conducted through existing women’s networks. The selected consultative and feedback provision mechanisms will be detailed in the POM and in safeguards documentation. The consultation mechanisms will be in line with the Government’s and WHO recommendations related to social interactions in times of emergencies and pandemics. The design of the reconstructed buildings will pursue functional upgrades that consider the personal safety, accessibility, and hygiene needs of women and will be informed by feedback received through the above mechanisms. Recognizing that more can be done to understand the incidence of gender-related violence during public health outbreaks, the Project will also seek improve surveillance of gender-related violence.
41. Monitoring. The relevant indicators include the following: (a) percentage of rehabilitated or reconstructed health and education facilities that have added or enhanced gender-responsive and universal access design features; (b) percentage of reported suspected cases of infectious disease reported and investigated per approved protocol (disaggregated by gender); and (c) number of surveillance sites established for the surveillance of gender-related violence or domestic violence, with data collection disaggregated by gender and, if possible, age.
42. Universal access and disability. All rehabilitation and reconstruction of health and education facilities will comply with national and EU regulations on universal access, in line with the World Bank’s corporate commitments. The design of the rehabilitated or reconstructed infrastructure will be informed through consultation mechanisms as described by the POM, such as consultations with existing networks and associations and building accessibility audits. Progress will be tracked through one disability-specific intermediate results indicator: percentage of rehabilitated or reconstructed health and education facilities that incorporate design features for universal access.
43. Citizen engagement. In the context of the outbreak and spread of COVID-19, the Government has taken various restrictive measures, imposing strict restrictions on public gatherings, meetings, and people’s movement, and others advising against public group events. People have been advised to exercise social distancing and specifically to avoid public gatherings to prevent and reduce the risk of the virus transmission. These restrictions have affected the approach to public consultation and stakeholder
20 Morrica, Valerie, Tara Sharafudheen, Paul Andres Corral Rodas, Ursula Casabonne, and Zuzana Boehmova. 2019. Investing in Opportunities for All Croatia: Country Gender Assessment. Washington, DC: World Bank Group. 21 https://www.unfpa.org/press/new-unfpa-projections-predict-calamitous-impact-womens-health-covid-19-pandemic- continues.
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engagement during Project preparation and may also have an impact on consultation approaches during implementation. The World Bank’s Technical Note on Public Consultations and Stakeholder Engagement was issued to guide the public consultation and stakeholder engagement activities during COVID-19, with the recognition that the situation is developing rapidly, and careful regard needs to be given to national requirements. It is important that the alternative ways of managing consultation and stakeholder engagement discussed with the client are in accordance with the local applicable laws and policies, especially those related to media and communication.
44. As such, consultations during the Project preparation phase were limited to relevant Government officials in the MoCPP, MoH, and MoSE, medical and educational staff, representatives/officials from the City of Zagreb, and representatives of the Croatian Patients Association and Parents Council. In addition to consultations that have taken place during Project preparation, a Stakeholder Engagement Plan (SEP) has been prepared and disclosed by the Government and the World Bank which will guide the approach to consultations and stakeholder engagement during implementation. The SEP will be reviewed and updated during Project implementation, as necessary, regarding adaptive stakeholder engagement arrangements, particularly the approach, methods, and forms of engagement proposed. This review and update of the SEP will be based on an assessment of the associated potential risks of virus transmission in conducting various engagement activities. In addition, a Grievance Redress Mechanism (GRM) will be established to address and mitigate adverse impacts on citizens that may arise during implementation. Progress will be tracked through two intermediate results indicators: (a) number of people reached through informative community meetings (percentage of which female) and (b) the percentage of grievances responded to within a stipulated time.
C. Project Cost and Financing
45. Total Project financing and implementation timeline. Table 5 provides the consolidated budget across all Project components. The Project will be implemented in four years.
Table 5. Project Cost and Financing Project Cost IBRD Financing Project Component (US$, millions) (US$, millions) Component 1: Earthquake Recovery and Reconstruction 180.0 180.0 • Subcomponent 1.1: Immediate Public Safety 9.0 9.0 Interventions • Subcomponent 1.2: Rehabilitation and Reconstruction of 170.0 170.0 Health and Education Facilities • Subcomponent 1.3: Housing Reconstruction Support 1.0 1.0 Program Design Component 2: Public Health Surveillance and Preparedness 15.0 15.0 • Subcomponent 2.1: Case management and Surveillance 8.2 8.2 • Subcomponent 2.2: Public Health Preparedness 6.8 6.8 Component 3: Project Management 5.0 5.0 • For PIU-1 (Ministry of Construction) 4.2 4.2 • For PIU-2 (Ministry of Health) 0.8 0.8 Total financing required (US$, millions) 200.0 200.0
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D. Project Beneficiaries
46. Direct beneficiaries include the earthquake-affected population in Zagreb City, Zagrebacka County, and Krapina-Zagorje County. This includes teachers, students, parents, community groups and networks, administrators, health care staff, laboratory staff, and patients that have regained access to health and education facilities that have been rehabilitated or reconstructed under the Project. The direct beneficiaries of the public health interventions include patients, health care workers, and the institutions involved in the emergency response. Direct beneficiaries also include the engaged Government stakeholders, including the MoCPP, MoH, and MoSE, who will benefit from institutional capacity-building and coordination activities.
47. Indirect Project beneficiaries include the entire population of Croatia because the public health preparedness interventions financed by this Project are aimed at monitoring and halting the spread of the virus, while preparing for future waves of infection. The entire population of Zagreb and surrounding areas, as well as domestic and international visitors, will also benefit from the public safety measures taken to reduce the immediate risk posed by post-earthquake debris.
E. Results Chain
48. Theory of Change. The provision and access to health care and education services (health facilities such as hospitals and health centers and education facilities such as kindergartens, primary and secondary schools, and scientific institutes) have been disrupted because of the March 22 earthquake. Public health services (for example, health institutes and research labs), critical to managing public health outbreaks have also been disrupted. Restoring these critical services requires strong interministerial coordination to plan and implement rehabilitation and reconstruction, to apply seismic safety provisions to public infrastructure investments, and to develop the capacity for financing reconstruction needs into the future, in part by supporting the institutional and technical capacity of the MoCPP. In parallel, by strengthening the functionality of public health preparedness systems, in case management, disease surveillance, and emergency operations, the Project will help the Government manage future public health emergencies, including any future outbreaks of COVID-19. The long-term outcomes of these investments are more resilient education and health services, with the latter supported by a stronger public health preparedness system, which can limit the size of outbreaks and avoid the health care system being overwhelmed.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
Figure 2. Project Results Chain
F. Rationale for Bank Involvement and Role of Partners
49. The proposed Project is part of a package of support the World Bank is preparing to assist the Government in addressing the multifaceted emergency caused by the global pandemic, the economic recession, and the earthquake. In addition to this emergency operation, the Government of Croatia has requested the World Bank’s assistance to support its efforts to address the economic consequences of the COVID-19 outbreak. As such, this Project’s support for reconstruction and public health surveillance and preparedness complements a parallel development policy operation of US$300 million focused on mitigating the economic and social impact of the COVID-19 pandemic and laying the foundations for inclusive and sustainable economic recovery as support to Croatia’s path toward IBRD graduation. In addition, another investment operation is being developed to provide a credit line for the Croatian Bank for Reconstruction and Development to cushion the financial shock on small and medium enterprises, by financing affected private sector companies.
50. While Croatia has received international support for the response to the earthquake, it falls far short of what is needed for earthquake reconstruction. In the immediate aftermath of the earthquake, the EU Civil Protection Mechanism was activated for medical items, a field hospital, and protective equipment. Slovenia, Hungary, Austria, and Italy provided in-kind assistance. These resources are limited,
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however, mostly focused on health and do not meet the recovery and reconstruction needs. Croatia is also expected to receive funds through the EUSF for earthquake recovery and reconstruction, but such support will be limited in comparison to the significant needs of reconstruction. These funds are expected to amount to up to 4 percent of total direct damages. The COVID-19 crisis and its consequent impact on the budget means that there will be limited fiscal space and that identifying sizable resources for earthquake recovery will be challenging. Considering the experience and eligibility under the EUSF, resources may become available in 9–14 months, which Croatia can use for specific response costs such as building of temporary housing and repair of critical infrastructure and cultural heritage buildings, which will not be covered by this Project.
51. The proposed Project would provide technical and operational support to help the Government meet some immediate needs following the earthquake but, equally importantly, help establish the medium-term capacity to fully recover from the earthquake and manage future risks. The Project aims to support the Government’s coordination and reconstruction process and build the technical and operational capacity of the MoCPP to attract future external investments through the EU or other development partners to accelerate and scale up reconstruction efforts. Technical support will also be delivered to the MoCPP to design and implement seismic-resilient rehabilitation measures that are not yet in place in Croatia, which will in turn build the local capacity of contactors to repair damaged buildings to seismic resilient standards.
52. The proposed Project will deliver technical support to improve the public health preparedness system, which follows previous World Bank-supported contributions to a substantive and successful reform of medical emergency services. These interventions have provided important overall support to health system strengthening22 that has proven critical in the response to the COVID-19 pandemic. The Project will build on that experience and deliver the relevant technical expertise, track record, and financing to expand the scope of interventions critical to public health (population) services. The Project will focus on building medium-term public health preparedness, capacity which will be critical to managing future public health emergencies, including any potential future COVID-19 waves.
53. This Project aims to serve as an institutional structure for ongoing recovery, including the Government’s efforts to attract other sources of financing for the national recovery and reconstruction program. Given that current external funds are not sufficient to finance the needs, the Project aims to catalyze additional resources to close the substantial financing gaps in the rehabilitation and reconstruction of damaged infrastructure. Subcomponent 1.3, specifically, aims to support the development of an operational instrument which can accommodate a range of financing sources, including from the private sector and potentially IFC, as well as other development partners, for the significant needs in the residential sector. The World Bank will provide technical support for capacity building to the reconstruction efforts as part of the proposed Project and use its convening power to attract development partners to support reconstruction.
22 The recent Program for Results (PforR) operation (Improving Quality and Efficiency of Health Services, P144871) was implemented from 2014 to 2019 and the Investment Project Financing (IPF) operation (Development of Emergency Medical Services and Investment Planning Project, P086669) was implemented from 2009 to 2013.
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G. Lessons Learned and Reflected in the Project Design
54. The proposed Project incorporates lessons learned from the World Bank’s extensive global experience in multisector post-disaster recovery and reconstruction, health, and the World Bank’s operational program in Croatia. The proposed Project draws on experience from the Romania Hazard Risk Mitigation and Emergency Preparedness Project (P075163), Turkey Disaster Risk Management in Schools Project (P157683), Colombia Disaster Vulnerability Reduction First Phase APL (P082429), Istanbul Seismic Risk Mitigation Project (P078359), and the Wenchuan Earthquake Recovery Project (P114107). This Project focuses on medium-term public health preparedness, and the design has been informed by the World Bank’s Strategic Preparedness and Response Program (SPRP), which is aligned with the WHO’s technical guidance on pandemic response. The proposed Project draws on SPRP guidance and the early design and implementation of the first group of 25 projects, which were approved by the Board on April 2, 2020. Project design has been informed by lessons learned from recent crises and outbreak, including the Ebola outbreak, the Global Food and Avian Influenza Crisis in 2007–2008, and the 2017 Food Crisis Response. The design is also informed by a recently completed PforR Improving Quality and Efficiency of Health Services (P144871), and the Justice for Business Project (P167247), approved in March 2020, under the new Croatia CPF.
• Strong coordination mechanism. Global experience demonstrates that clear coordination and implementation arrangements are critical for multisectoral projects. Recognizing that coordination across Government ministries is often complex and suboptimal, the Project is designed to support the Government in responding in a streamlined fashion. The Project will empower central leadership to guide the efficient execution of interministerial and multi- jurisdictional activities. This will be done through integrated implementation arrangements designed under the Project, which actively engage relevant stakeholders and regularly report progress and issues to senior leadership, reinforcing the robust coordination required to respond to this multifaceted crisis.
• Framework approach. Adopting a framework approach provides the necessary flexibility for emergency projects. A common feature in emergency recovery projects is a flexible project design which allows the prioritization and identification of specific investments to be conducted during implementation. This approach also allows smaller and less complicated subprojects to be implemented rapidly and early on and provides more time for larger and more complex subprojects.
• Careful evaluation of costs. Underestimating rehabilitation and replacement costs leads to cost overruns and reduces the number of buildings that can be covered. To mitigate this risk, reflecting global experience in similar projects, the Project includes an annual review that will be prepared and monitored during implementation to ensure timely adjustments of costs and targets.
• Functional upgrades and energy efficiency. The inclusion of functional upgrades (universal accessibility and modern and service provision standards) and energy efficiency measures makes retrofitting of public facilities more effective and sustainable, with additional short- to medium-term benefits. The additional costs of these upgrades are often marginal compared to the costs of seismic retrofitting and combining these types of interventions reduces the time that buildings are not operational. Enhancing energy efficiency contributes
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directly to climate change mitigation efforts. Experience from projects such as the Istanbul Seismic Risk Mitigation Project or Turkey Disaster Risk Management in Schools Project show that these functional upgrades are most successful when the beneficiary communities are consulted on the design of the rehabilitated and reconstructed facilities.
• Sustainability of laboratory diagnostics. There is a risk of overinvesting in infrastructure and equipment. Most avian influenza projects, for example, aimed to improve laboratory capacity through facility upgrades, equipment purchases, and training. Technical training of health workers and systems for knowledge sharing and communication is an effective way to build response capacity and, therefore, this Project incorporates both training and the provision of laboratory equipment and supplies.
• Feasible targets. Setting feasible targets and being cognizant of the complexity of health sector issues is critical, the proposed Project will build on the foundation of the recently completed Croatia Health PforR. The selection criteria for reconstruction activities will consider key sector issues, such as the need to alleviate health financing and service delivery challenges, to keep the sector on a path toward increased efficiency and improved quality and move it away from an expensive, hospital-focused care delivery model.
III. IMPLEMENTATION ARRANGEMENTS
A. Institutional and Implementation Arrangements
55. Project Steering Committee (PSC). A PSC will be chaired by the MoCPP State Secretary and comprise representatives from the Ministry of Finance (MoF), MoH, MoSE, Ministry of the Interior, the City of Zagreb, Zagrebacka County, and Krapina-Zagorje County. The PSC will have a core body and can extend invitations to other parties depending on the agenda of the meeting. The Ministry of Regional Development and EU Funds, Ministry of Culture, and other stakeholders may also be consulted and invited to selected meetings of the committee. The main responsibility of the PSC will be to review the annual project work plan, facilitate adequate multisectoral and cross-agency coordination, monitor the progress of Project implementation, and make recommendations to improve the Project implementation. The committee will meet at a minimum every six months. During the first year of the Project, it may meet more frequently, and organize additional meetings as required.
56. Project implementation. The main Project Implementation Unit (PIU) will be established within the MoCPP. The MoCPP PIU (PIU-1) will be responsible for Component 1, as well as civil works under Component 2 and will be accountable for reporting to both the World Bank and the PSC on all Project activities and progress. The MoCPP PIU will be responsible for the preparation of consolidated reports. A second PIU, the MoH PIU (PIU-2), will be established within the MoH and will be responsible for Component 2. Each PIU will be responsible for overall implementation of its respective components, including functions such as FM, procurement, technical inputs, progress monitoring, quality control, and social and environmental safeguards. The Project will be implemented and managed by a mix of civil servants from the respective line ministries and experienced external consultants. Component 3 will finance all operational functions of the PIUs including building staff capacity in technical, procurement, FM, M&E, environmental and social safeguards, and communication.
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B. Results Monitoring and Evaluation Arrangements
57. M&E will be carried out by the MoCPP PIU on the basis of the indicators and milestones developed in the Results Framework. Project monitoring will occur as a periodic function and will include carrying out process reviews/audits, reporting on outputs, and maintaining progressive records, as well as third-party monitoring and social auditing. Broad thematic areas and activities include the following: (a) social and environmental monitoring, (b) regular quality supervision and certification, (c) periodic physical progress monitoring and third-party quality audit, and (d) M&E.
58. The MoCPP PIU will prepare consolidated semiannual progress reports. It will cover the following: (a) physical and financial progress achieved against agreed implementation and disbursement indicators; (b) issues and problem areas, including comments on actions to address identified problems; and (c) work programs and cost estimates for the coming year, including revised estimates for the former period. The reports will also include data on grievances and resolutions to allow for timely corrective action.
C. Sustainability
59. Infrastructure sustainability. The Project will adopt a ‘building-back-better’ approach for the rehabilitation and reconstruction of damaged health and education facilities. The sustainability of the infrastructure investments will be enhanced through: (a) risk-informed design of infrastructure suitable to local conditions, national and EU building codes, and accepted level of residual risk; (b) adequate quality control in building construction; and (c) functionality upgrades and climate-resilient designs, including energy efficiency improvements, informed by consultations with stakeholder and communities. Building interventions will be designed with improved engineering standards, in accordance with national and EU building codes, engineering standards, and construction regulations and will utilize good practices to improve the long-term sustainability of public infrastructure and housing. Expert engineering technical assistance, technical audits, and on-site construction monitoring support will help enhance building quality and extend the durability of infrastructure. The Project will also support functional upgrades and energy efficiency improvements in buildings to be reconstructed or rebuilt. The increased energy efficiency is expected to reduce the overall operations and maintenance costs in the medium to long term, as well as support climate change adaptation and sustainability.
60. Institutional and financial sustainability. The operationalization of a coordination mechanism and the technical experience with planning and implementing rehabilitation and reconstruction investments, combined with project management, is expected to improve the capacity of the MoCPP to scale rehabilitation and reconstruction efforts. The fiscal impacts of disasters require significant capital expenditures for repairing and reconstructing damaged infrastructure facilities. The Project will reduce the Government’s contingent liability by making the Project-supported health and education facilities more resilient to adverse natural events.
61. Improving preparedness capacity and health systems. While the investments of the proposed Project have been selected to support critical needs in strengthening emergency response capacity are not large, they are critical elements to any COVID-19 re-emergence. Based on current information, there is a likelihood of COVID-19 recurring in late 2020 and early 2021. By building public health preparedness, the Government will be more able to mount a strong response in the event of a public health emergency, including a recurrence of COVID-19. The approach to health facility reconstruction will consider immediate
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needs, such as replacing the capacity for maternal and neonatal care, and long-standing sector needs, including supporting the health system’s financial sustainability.
IV. PROJECT APPRAISAL SUMMARY
A. Technical, Economic, and Financial Analysis
62. Prioritization. An initial assessment of damaged health and education facilities undertaken by the University of Zagreb, Faculty of Civil Engineering, identified over 247 damaged facilities, of which 43 suffered moderate to severe damage. Of these buildings, the Project will finance selected investments based on eligibility and prioritization criteria aimed to ensure that the most critical infrastructure is supported under the Project and that all Project-supported facilities are consistent with the sectoral investment plans (in both cases based on the need for overall consolidation of facilities nationwide). Key eligibility and prioritization criteria include the following: (a) damage levels, to ensure that structures made most vulnerable by the earthquake are addressed to ensure life safety; (b) sectoral relevance, to focus investments on critical infrastructure based on sector outcome objectives and service delivery needs, to avoid unnecessary investment consistent with the sector plans; (c) technical and financial eligibility, to ensure that rehabilitation of partially damaged buildings, as opposed to new construction, are duly considered; and (d) environmental and social risks, to ensure that investments do not cause significant unforeseen environmental or social impacts, nor need for land acquisition or involuntary resettlement.
63. During implementation, a two-step prioritization process will be undertaken. First, the potential investments will be screened for eligibility based on damage levels, sector relevance, and their likely economic, financial, environmental, and social impacts. Eligible subprojects would then be subject to a detailed engineering assessment which, in addition to providing critical information for bidding documents, would confirm the economic and financial viability of the proposed investments and confirm that any environmental and/or social risks are manageable. Selected investments would be included in the annual investment program prepared by the PIU and submitted to the World Bank for its no-objection. Detailed criteria for the screening and prioritization will be detailed in the POM.
64. Technical surveys and feasibility studies. Upon completion of technical surveys, feasibility studies will consider a minimum of two solutions based on the technical survey recommendations, the energy efficiency audit, and the building’s level of upgrading. The feasibility studies will also include cost-benefit analysis (CBA) to ensure that the cost of retrofitting is below estimated replacement cost ratio.
65. Reconstruction versus replacement. The technical approach will consider rehabilitation of structures where technically and financially feasible. Where the existing building quality does not allow for structural strengthening, the Project will consider demolition and reconstruction. Demolition and new construction will be undertaken when the cost of strengthening approaches the replacement cost of the building. The evaluation of the replacement value will include all costs associated with reconstructing a building at today’s standard and codes, including demolition of the existing building and other costs associated with the construction process.
66. Reconstruction and construction supervision. Technical designs will follow EC8 and safety provisions under the draft Law on Reconstruction of Damaged Buildings in Zagreb and the Surrounding Area, or local applicable codes, which experts acknowledge is suitable for the seismic conditions of
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Croatia. The Project will also finance a technical team of seismic engineers to support the PIU to review the retrofitting and reconstruction designs. The overall quality control of design and construction will be provided through: (a) design review by qualified and experienced national and/or international seismic experts and structural civil engineers, (b) site supervision and technical control by PIU engineers with experience in seismic retrofitting and reconstruction supervision, and (c) on-site experienced Croatian or internationally procured construction supervision consultants. The designs will also include gender and disability-specific considerations, such as universal accessibility standards, women’s safety, compliant ramps, bathroom design, and adequate lighting.
67. Non-eligible investments. There will be no land acquisition or involuntary resettlement under the Project. All buildings addressed will be reconstructed in situ within the bounds of existing building footprints or on available publicly owned land.
68. Disaster and climate change resilience. The Project promotes the building-back-better approach, which comprises improvements in design standards, construction quality, and functionality. The integration of seismic and climate change consideration into the infrastructure designs of investments under Subcomponents 1.2 and 2.1 will further enhance the resilience of infrastructure to future disaster and climate risks and help protect people’s lives, livelihoods, and assets, contributing to climate change adaptation and mitigation efforts.
69. Global knowledge. The Project will also seek to leverage established global knowledge of the World Bank, considering best practice on seismic engineering, recovery, and reconstruction in historical and urban environments, resilient critical infrastructure, and public health emergency management. Global experiences to attract private sector financing to support investments in housing reconstruction (as part of Subcomponent 1.3) will also be considered. This experience may come from countries that established financial programs to provide subsidies and loans to homeowners in the aftermath of a disaster or from countries that have established similar programs to promote energy efficiency.
Economic and Financial Analysis
70. Summary. A preliminary CBA was conducted focusing on Component 1, which accounts for over 75 percent of the overall Project investments. Given the emergency nature of the Project, the current analysis should be considered as preliminary and will be further refined and expanded as more detailed data become available. The CBA methodology applied draws on a World Bank policy paper23 that identifies six key variables to assess the efficiency of risk reduction efforts (such as retrofitting and reconstructing critical social infrastructure). These variables include the following: (a) strengthening/retrofit costs, (b) building replacement costs, (c) the risk of a natural disaster (and of the scale of that disaster), (d) the risk of damage if a natural disaster does occur, (e) the cost of that damage in both financial and human terms, and (f) the discount rate.
71. Approach. CBAs were conducted for both education and health facilities. Analysis of the education facilities was based on an estimated investment cost of €45.5 million for rehabilitation and reconstructions of 22 buildings, considered the following key parameters: (a) Project implementation
23 Charles Kenny. 2016. “Why Do People Die in Earthquakes? The Costs, Benefits, and Institutions of Disaster Risk Reduction in Developing Countries.” Policy Research Working Paper 4823, World Bank Group, Washington, DC.
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period and a 20-year planning horizon; (b) a 6 percent discount rate in line with World Bank practice; (c) the concept of value of a statistical life (VSL), which is estimated to equal US$2.185 million for Croatia;24 (d) an annual earthquake exceedance probability of 1.5 percent and a corresponding mortality rate of 0.1 percent with the Project (versus 6 percent without the Project); (e) average floor area and costs expected for rehabilitated and reconstructed health and education facilities; and (f) an assumed 85/15 ratio of rehabilitation to reconstruction. Initial results for health facilities also returned positive economic benefits (greater than 6 percent) when additional co-benefits (quantified as avoided disruption of health services) were included. Given the emergency nature of the operation, additional analysis is under way and will continue into the early phases of implementation to establish more robust projections. Given the nature of health facility investments, which can range greatly in terms of cost, these will be highly dependent on final designs and specifications.
72. Preliminary findings. Based on these parameters, the calculated economic rate of return for an estimated €45.50 million of investments into elementary and secondary education facilities which sustained damages, rendering them unusable (see annex 6 - categories red and yellow), is 19 percent, and the benefit-cost ratio is 2.07, with a net present value of €41.07 million, all of which indicate that these investments are an acceptable investment prospect. It is also noteworthy that the Project’s efficiency parameters are highly sensitive to the VSL estimate and the number of lives saved, and these parameters play a vital role in whether the Project is feasible in economic terms. There will likely be additional benefits not quantified in the CBA analysis at this stage, including lowered operational and maintenance costs linked to improved energy efficiency, and other co-benefits such as improved functionality and quality of investment contributing to improved livability and quality of services for over 10,400 students and staff using these buildings. The Project efficiency parameters are rather conservative estimates.
B. Fiduciary
Financial Management
73. Responsibility for the Project’s FM will rest with the respective units responsible for Project implementation in the relevant entity ministries, which will maintain a satisfactory project accounting system, capable of tracking all Project resources and expenditures and generating regular financial reports. The existing FM arrangements of the units/departments responsible for Project implementation (that is, the MoH and MoCPP) have been assessed to determine if these arrangements (budgeting, accounting, reporting, internal control, staffing, funds flow, and audit) are satisfactory to the World Bank. Subject to implementation of the agreed action plan laid out below, the FM arrangements are considered to meet the minimum requirements of the World Bank’s operational policies.
74. Implementation of an action plan has been agreed to strengthen the FM arrangements. Actions under the plan include: (a) formally assigning FM specialists to perform fiduciary functions under the Project to the units responsible for Project implementation and (b) preparing FM sections of the POM.
75. The teams within the MoH and MoCPP have the relevant experience for implementing donor- funded projects. The team in the MoH responsible for Project implementation for the second component
24 Viscusi, W. Kip, and Clayton J. Masterman. 2017. “Income Elasticities and Global Values of a Statistical Life.” Journal of Benefit-Cost Analysis 8, 2 (Summer 2017): 226–50.
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has relevant experience in implementing World Bank health sector projects, while the MoCPP team has relevant experience in financial management of EU-funded projects.
76. The MoH and MoCPP will prepare quarterly Interim Financial Reports (IFRs), which include the following categories: Sources and Uses of Funds, Uses of Funds by Project Activity, Statement of Financial Position, Designated Account (DA) Reconciliation Statement, and Statement of Expenditure (SOE) Withdrawal Schedule. The PIUs will prepare IFRs for the Project covering the semester, in form and substance satisfactory to the World Bank, and furnish them to the World Bank no later than 45 days after the end of each calendar semester.
77. The units in the MoH and MoCPP will be responsible for the timely compilation of the annual Project financial statements for the independent external audit. Project financial statements (including SOE and DA activities) will be audited by an independent auditor acceptable to the World Bank. Each audit of the financial statements shall cover the period of one fiscal year of the borrower, commencing with the fiscal year in which the first withdrawal was made under the loan. In addition, the auditors are expected to deliver management recommendation letters in relation to the Project. Each management recommendation letter will identify internal control deficiencies and accounting issues, if any. The audit reports, audited financial statements, and management recommendation letter will be delivered to the World Bank within six months of the end of each fiscal year. The audited Project financial statements will be made publicly available on time and in a manner acceptable to the World Bank.
78. The MoF will open two analytical accounts in the State Treasury which will be used as DAs in line with the existing Treasury procedures. The loan funds will flow from the World Bank through the Croatian National Bank to the DAs and through the Treasury system to the MoH and MoCPP, who will pay directly to contractors based on approved invoices. Such an approach was assessed to be acceptable by the World Bank. The disbursement methods made available are direct payment, reimbursements, and advances. The ceiling and minimum amount for direct payments will be flexible enough to allow for quick emergency payments. The DAs will be denominated in euros. The expenses related to the disbursements of works, goods, consultancy and non-consultancy services, and incremental operating expenses will be documented using statements of expenditure or invoices in case of direct payments. Details with respect to disbursements will be included in the Disbursement and Financial Information Letter.
79. The Project will have the flexibility of using retroactive financing. No withdrawals are to be made for payments made before the date of the Loan Agreement, except for withdrawals for eligible expenditures of the Project according to the Financing Agreement, which are permissible up to an aggregate amount not to exceed 40 percent of the total amount of the loan. Retroactive financing will be eligible from the date of the earthquake, March 22, 2020.
80. The overall FM risk rating was assessed Substantial before the application of the mitigation measures. After the application of the FM risk mitigation measures, the risk had been assessed Moderate. Some of the mitigation measures will include confirmation of the FM staffing (for the MoCPP), confirmation of the reporting formats for IFRs, confirmation of the audit terms of references, and designing of the flow of funds and agreeing internal controls arrangements for the Project.
81. Implementation support and supervision plan. During Project implementation, the World Bank will supervise the Project’s FM arrangements in two main ways: (a) review the Project’s IFRs, as well as the annual audited financial statements and auditor’s management recommendation letters, and (b)
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perform on-site supervision (with the frequency based on the assessed Project’s risk and performance; the first supervision is to take place nine months after the assessment) and review the Project’s FM and disbursement arrangements to ensure compliance with the World Bank’s minimum requirements. The on-site supervision will include a review of the following FM areas: accounting and reporting, internal control procedures and external audits, planning and budgeting, funds flow, and staffing arrangements. A sample transactions review will also be conducted. Implementation support and supervision will be performed by the World Bank-accredited senior FM specialist. As a result of the COVID-19 pandemic, the FM supervision will shift to virtual reviews but will also include field visits as soon as feasible.
Procurement
82. Procurement will be carried out in accordance with the World Bank’s Procurement Regulations for IPF Borrowers. The Project will be subject to the World Bank’s Anti-Corruption Guidelines, dated October 15, 2006, and revised in January 2011 and as of July 1, 2016.
83. Planned procurement. Major planned procurement includes: (a) the reconstruction of critical infrastructure damaged in the earthquake, focused on two key sectors needed to ensure continuity of critical services, health and education), and including consulting services required for the design and supervision of such subprojects; (b) detailed engineering assessment of damaged health and education facilities; (c) immediate recovery activities, including debris removal and other activities to ensure life safety; (d) technical assistance to establish a financial support program for reconstruction of private housing; (e) supplies and equipment for public health emergencies; (f) emergency vehicles, equipment, and training to strengthen capacity to respond to public health emergencies; (g) PPE for health workers; (f) equipment and supplies for telemedicine to monitor and support patients through outbreaks; (g) repurposing equipping of selected primary health care facilities and hospitals so they can deliver critical medical services and cope with increased demand for services in the event of a health emergency; (h) support for institutional and organizational restructuring and training of staff for outbreak management activities; and (i) staff and consultant costs associated with Project implementation, coordination, and management, including training and fiduciary (procurement and FM) support.
84. Project Procurement Strategy for Development (PPSD). The preparation and finalization of a streamlined PPSD has been deferred to implementation stage. The proposed procurement approach prioritizes fast-track procurement for the emergency goods, works, and consulting and non-consulting services needed. Details of the procurement approach are included in annex 2.
.C. Legal Operational Policies . Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No .
D. Environmental and Social
85. The proposed Project is subject to the World Bank’s ESF. Six Environmental and Social Standards (ESS) are relevant to the proposed Project: ESS1: Assessment and Management of Environmental and
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Social Risks and Impacts, ESS2: Labor and Working Conditions, ESS3: Resource Efficiency and Pollution Prevention and Management, ESS4: Community Health and Safety, ESS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources, and ESS10: Stakeholder Engagement and Information Disclosure. The requirements of these standards are addressed through the ESF instruments, as described in the following paragraphs.
86. The environmental and social risks are rated Substantial. Although the long-term impacts of the Project are likely to be positive, its activities carry several risks. First, the planned interventions related to immediate recovery and rehabilitation of structures, potential demolition of unsafe buildings, and the construction of new buildings carry risks typical for construction works: operational health and safety risks, community health and safety risks, dust and noise emissions, traffic disruption, generation of large quantities of construction waste, exposure of workers and building occupants to hazard materials (for example, asbestos containing materials and medical waste) before and during demolition and rehabilitation activities; unsafe working conditions; and poor occupational health and safety practices. Activities under the Component 1 may produce low to moderate adverse effects for Natura 2000 and protected areas as some of the earthquake-affected settlements are located in these areas. However, the effects will be temporary, predictable, and typical for smaller civil works and, as such, easily mitigated.
87. While the Project is not specifically targeting the current COVID-19 outbreak, it will be implemented in the contect of the ongoing global pandemic. Therefore, some environmental and social risks relate to that context: (a) generation, management, storage, and disposal/treatment of medical waste, including infectious waste; (b) risks related to management, storage, and disposal of chemicals; (c) occupational health and safety risks related to working in highly contagious environments and availability and use of protective equipment and hygiene materials; and (d) risks related to civil works (rehabilitation, adaptation, and refurbishment) as a part of the establishment of specialized hospital units, laboratories, and other infrastructure. The envisaged small-scale civil works are expected to take place in existing health care facilities, producing predictable, localized, limited, and temporary environmental and social impacts that are easily mitigated. On the other hand, ensuring that contagion vectors are controlled entails significant challenges. These will be met through strict adherence to WHO recommendations, national regulation, and standard procedures for medical waste management and disposal and by the use of appropriate protective and hygiene equipment by all health care workers. As buildings under any type of cultural heritage protection will not be eligible for financing, no impacts on cultural heritage is envisaged.
88. No involuntary resettlement, land acquisition, or permanent restrictions to access are anticipated, as all civil works will be carried out within their existing footprints. Any reconstruction activities that might cause land acquisition or involuntary resettlement will not be eligible for financing. Additionally, private buildings that would require immediate repairs but determined to be at risk of partial or total collapse due to structural damage will be excluded from Project financing. There will be no deployment of security forces in the implementation of any of the Project activities. Labor-related risks typically associated with a large and diverse workforce, such as child labor, labor influx, and gender-based violence, are minimal. All contractors and workers employed in construction activities are likely to be locally based. The Environmental and Social Management Framework (ESMF) and subsequent site-specific Environmental and Social Management Plans (ESMPs) will include measures to mitigate these risks.
89. No major adverse social impacts are expected under Component 2. Adequate measures will be taken ensure that vulnerable groups have access to services. In the event of a public health outbreak, systems are in place to prepare risk communications materials focusing on behavioral and sociocultural
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risks and preventive measures, given the nature of the outbreak, using a variety of media such as broadcast media (television and radio), audiovisuals, and a toll-free call-in number. The provision of services and supplies will be based on the urgency of the need, in line with the latest data related to the prevalence of the relevant public health outbreak and the associated cases. In addition, the MoH will put in place adequate measures to ensure that the medical isolation of individuals does not increase their vulnerability, especially to gender-based violence and sexual exploitation and abuse. The MoH will use the SEP, which outlines a structured approach to engagement with stakeholders based upon meaningful consultation and disclosure of appropriate information, considering the specific challenges associated with public health outbreaks and emergencies and the need for improved hygiene and social distancing. For the most vulnerable—the elderly and those with compromised immune systems due to preexisting conditions—stakeholder engagement would minimize close contact and follow the recommended hygiene procedures.
90. The above specified environmental and social risks will be managed through robust and well- implemented mitigation measures, which will be outlined in the Project ESMFs. The ESMFs (separate documents will be developed for Components 1 and 2) will clearly set out the environmental and social assessment requirements of the two components and provide guidance on the preparation of site-specific ESMPs and/or checklists, as well as Infection Control and Waste Management Plans (ICWMPs) and contractors’ codes of conduct. For the event of a public health emergency and if ICUs are needed, the ESMF will include a template for the ICWMP to be adopted and implemented by all intensive care units (ICUs) and laboratories supported by the Project. The ESMF will also provide detailed procedures for treating patients (based on WHO guidance), as well as Environmental Health and Safety Guidelines for staff in ICUs and laboratories, including those relating to the necessary PPE. Furthermore, the document will provide requirements for adequate medical waste management. All these provisions will then be used for preparing the ICWMP, which will provide best international practices in public health emergency diagnostics, testing, and response and treatment activities, based on the relevant World Bank Group Environmental Health and Safety Guidelines, on Good International Industry Practice (GIPP), and on WHO quarantine and biosafety guidelines for public health outbreaks.
V. GRIEVANCE REDRESS SERVICES
91. Communities and individuals who believe that they are adversely affected by a World Bank– supported Project may submit complaints to existing Project-level grievance redress mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address Project-related concerns. Project-affected communities and individuals may submit their complaint to the Bank’s independent Inspection Panel, which determines whether harm occurred, or could occur, as a result of the World Bank’s noncompliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank’s attention and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate GRS, please visit. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.
VI. KEY RISKS
92. The overall risk is rated Substantial. The key risks that could affect the achievement of the PDO and proposed mitigation measures are described below.
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93. Macroeconomic risk is High. While the macroeconomic framework in Croatia has been appropriate in recent years, with a stable exchange rate and prudent fiscal policies, the country’s resilience to external shocks remains relatively weak, in part because of the country’s high reliance on tourism. Prolongation of the COVID-19 crisis could result in even stronger economic contraction, built up by exchange rate pressures, and a significant rise in fiscal imbalances. While the macroeconomic stability would likely be preserved, large adverse social impacts of the shock could be unavoidable in the short term, undermining the rapid economic recovery in the medium term.
94. Risk related to sector strategies and policies is Substantial. The proposed operation will finance critical reconstruction in the health and education sectors as well as take measures to strengthen the public health preparedness capacity of the country. While the investments identified under Component 1 will be measures aimed at restoring services in Zagreb and its environs, both sectors are challenged with important medium-term reform agendas including the financial sustainability of service delivery and some overcapacity. The Project design is cognizant of these risks, and efforts have been made to incorporate prioritization and screening criteria to focus on investments which will not undermine medium-term sector reforms. The operation will also be complemented by an evolving institutional arrangement for reconstruction, including the potential adoption of the Law on Reconstruction of Damaged Buildings in Zagreb and the Surrounding Area and the entrance of other financiers into the reconstruction space. While the Project design does not rely on the enactment of any new law to achieve its PDO, its passage could bolster the Project’s built-in coordination mechanism that brings the relevant stakeholders (MoCPP, line ministries, and local authorities) together as part of the Project Steering Committee. The Government reconfirmed that the current legal framework will allow the MoCPP to carry out the implementation of the Project in line with the design of the Loan Agreement and the POM. The POM will further spell out roles and responsibilities of the relevant implementation arrangements. During implementation, the World Bank will carefully supervise the legal landscape with regard to the reconstruction and recovery.
95. Institutional capacity for implementation and sustainability risk is Substantial. The importance of investing in the earthquake recovery is acknowledged by the Government but the high number of involved stakeholders poses a risk during implementation of the response. While the MoH has implemented World Bank projects, the MoCPP has not implemented a World Bank project, and hence Project implementation capacity would have to be built. The MoCPP is, however, a key stakeholder in the recently approved Justice for Business Project which provided the MoCPP with insights into the World Bank’s rules and procedures. To mitigate this risk, the Project will engage external specialists with experience implementing World Bank projects in Croatia. Both PIUs will have staff from the implementing line ministries to ensure technical quality, including planning, design, engineering, and supervision of the procurement of goods and execution of works.
96. The environmental and social risks are Substantial. The planned interventions related to immediate recovery and rehabilitation of structures, potential demolition of unsafe buildings, and the construction of new buildings carry risks typical for construction works: operational health and safety risks, community health and safety risks, dust and noise emissions, traffic disruption, generation of large quantities of construction waste, exposure of workers and building occupants to hazard materials before and during demolition and rehabilitation activities; unsafe working conditions; and poor occupational health and safety practices. The efforts to curb and minimize effects of the COVID-19 outbreak pose the following risks: generation, management, storage, and disposal/treatment of medical waste, including infectious waste; risks related to management, storage, and disposal of chemicals; and occupational health and safety risks related to working in highly contagious environments and to availability and use of
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protective equipment and hygiene materials. Though activities are possible in settlements within the borders of Nature Park Medvednica and protected parks in Zagreb, they will take place exclusively in urbanized sections; thus, only low to moderate and temporary impacts are expected in this respect. To address these risks, each PIU will develop an ESMF which will include a robust set of mitigation measures.
97. The stakeholder risks are Substantial. Given the Project’s multidisciplinary nature and the involvement of multiple stakeholders; interinstitutional coordination and cooperation of several players is necessary for achieving the PDO. To mitigate these risks, the Project Steering Committee (PSC) will be established and include representatives of the MoCPP, MoH, MoSE, MoF, and the City of Zagreb. The World Bank will continue to support institutional coordination to ensure political buy-in from key stakeholders beyond the relevant ministries, such as the City of Zagreb politicization of the quake that will put pressure on all agencies. .
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VII. RESULTS FRAMEWORK AND MONITORING
Results Framework COUNTRY: Croatia Earthquake Recovery and Public Health Preparedness Project
Project Development Objectives(s) The Project Development Objective (PDO) is to assist Croatia with earthquake reconstruction efforts in Zagreb and the surrounding areas, improve institutional capacity for reconstruction, and strengthen national systems for public health preparedness.
Project Development Objective Indicators
RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 To assist Croatia with earthquake reconstruction efforts, improve capacity for reconstruction
Rehabilitated or reconstructed health and education buildings with restored operational capacity 0.00 0.00 25.00 60.00 100.00 and higher seismic performance (Percentage)
Buildings which have benefited from debris removal and/or repair 0.00 35.00 35.00 35.00 35.00 (Percentage)
Croatia has developed policy options for the design of a financial No Yes Yes Yes Yes support program for housing reconstruction (Yes/No) and to strengthen public health preparedness systems
Reported suspected cases of a 0.00 10.00 30.00 60.00 80.00
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 selected health condition (a selected tracer condition) reported and investigated per approved protocol (disaggregated by gender) (Percentage)
PDO Table SPACE
Intermediate Results Indicators by Components
RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 Component 1: Earthquake Recovery and Reconstruction Designs for rehabilitation or reconstruction of health and education buildings completed 0.00 50.00 90.00 100.00 100.00 (Percentage) Health and education buildings rehabilitated or reconstructed that have gender-responsive and 0.00 0.00 3.00 7.00 10.00 universal access design features (Number) Institutional coordination mechanism operational and key technical capacity in engineering, No Yes Yes Yes Yes procurement and contract management in place (Yes/No) Technical recommendations for the design of a housing reconstruction No Yes Yes Yes Yes program developed (Yes/No) People reached through 0.00 500.00 1,000.00 2,000.00 2,500.00
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 informative community meetings (Number) Percentage of which female 0.00 30.00 35.00 40.00 48.00 (Percentage) Beneficiaries satisfied with rehabilitated or reconstruction health and education buildings 0.00 40.00 50.00 60.00 70.00 (disaggregated by gender) (Percentage) Component 2: Public Health Surveillance and Preparedness National guidelines for surveillance system updated including 15 health 0.00 3.00 5.00 10.00 15.00 conditions (Number) Sentinel sites for respiratory viruses providing quarterly reports 0.00 0.00 1.00 2.00 3.00 (Number) Assessments of the surveillance system conducted (Number) 0.00 0.00 1.00 1.00 2.00 Surveillance sites established for the surveillance of gender-related violence or domestic violence, with 0.00 0.00 1.00 2.00 3.00 data collection disaggregated by gender (Number) Component 3: Project Management Grievances responded to in the 0.00 75.00 80.00 90.00 100.00 stipulated time (Percentage)
IO Table SPACE
UL Table SPACE
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection This indicator will measure the percentage of the rehabilitated or reconstructed health and education buildings with restored operational capacity and improved seismic performance financed by the project. Health facilities can include hospital and health centers (sub-component 1.2) as well Rehabilitated or reconstructed health and as public health laboratories Monitoring education buildings with restored (sub-component 2.1), while Annual Monitoring reports MoCPP, MoH, MoSE reports operational capacity and higher seismic education facilities can performance include kindergartens, primary and secondary schools, university buildings, and research institutes (sub- component 1.2). Seismic performance refers to the probable consequences of a building's response to earthquake shaking. The denominator will be the total number of rehabilitated or reconstructed health and
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education buildings financed by the Project. This indicators measures the buildings which have benefited from removal and repairs. Interventions include debris removal and removal of damaged roofs and chimneys, along with minor repairs to Review/technical audit nonstructural elements of Progress of invoices for Buildings which have benefited from Annual MoCPP communal parts of reports immediate life-safety debris removal and/or repair buildings. The percentage measures implemented refers to the share of the buildings covered under the Project out of the total percentage of buildings supported by the Government through its own resources.
Country-specific policy options have been Croatia has developed policy options for Progress developed to inform and Annual Progress reports MoCPP the design of a financial support program reports guide the establishment of a for housing reconstruction housing reconstruction program. Reported suspected cases of a selected This indicator will use Administrative data health condition (a selected tracer COVID-19 as a tracer Every 6 records, field MoH and PIU MoH and PIU condition) reported and investigated per condition to assess the months verification of approved protocol (disaggregated by strength of public health availability of gender) preparedness systems. The equipment.
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
numerator will be the total number of suspected COVID-19 cases, which are investigated based on MoH guidelines, including contact tracing. The denominator will be the total number of reported, suspected COVID- 19 cases. The data collection will be disaggregated by gender and age. ME PDO Table SPACE
Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection This indicator will measure Monitoring reports will the number of detailed Designs for rehabilitation or Monitoring draw on information engineering assessments of Annual. MoCPP. reconstruction of health and education reports. provides by detailed the damaged health and buildings completed designs reports. education buildings financed
by the project. This indicator will monitor the number of health and education buildings Health and education buildings rehabilitated under the Construction rehabilitated or reconstructed that have Annual Monitoring reports MoCPP, MoSE, MoH project (sub-component 1.2 reports gender-responsive and universal access and 2.1). Rehabilitation” is design features defined as structural strengthening of existing buildings to meet a higher
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seismic performance; “reconstruction” is defined as demolishment of existing building and subsequent construction new buildings in replacement. The rehabilitation and reconstruction will also consider gender-sensitive and universal access design features, such as universal accessibility standards, women’s safety, compliant ramps, bathroom design, adequate lighting, etc. This indicator will monitor the establishment and functioning of institutional arrangements, including of the Project Steering Committee, to implement and coordinate Institutional coordination mechanism rehabilitation and Monitoring operational and key technical capacity in Annual Monitoring reports MoCPP reconstruction efforts. It will reports engineering, procurement and contract monitor the implementation management in place capacity within the PIU established under the MoCPP, including hiring of experts consultants as needed to fill identified technical and project management gaps.
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This indicator will monitor the delivery of consultancy services to provide guidance Technical recommendations for the Monitoring to the establishment of a Annual Monitoring reports. MoCPP. design of a housing reconstruction reports. financial support program program developed for rehabilitation and reconstruction of private housing. The users of health and education buildings to be rehabilitated or Progress reports reconstructed will be drawing on informed and consulted in a Progress consultation People reached through informative Annual MoCPP, MoH, and MoSE timely manner about the reports mechanisms organized community meetings nature, planned timeline and used, including and expected outcomes of online/ virtual tools. the intervention. This may include in-person and online consultations. MoCPP, MoH, MoSE Percentage of which female
This indicator will measure the percentage of surveyed Beneficiary beneficiaries of selected surveys, com education and health munity Beneficiaries satisfied with rehabilitated facilities with positive Annual scorecards, Monitoring reports MoCPP, MoSE, MoH or reconstruction health and education responses (satisfied, very other buildings (disaggregated by gender) satisfied) with key aspects of consultative the rehabilitation and mechanisms reconstruction process,
including aspects such as information available,
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facilities, disaggregated by gender and by people with a disability. This indicator will monitor the updating of guidelines for preventing and detecting 15 conditions, which draw National guidelines for surveillance Semi- MoH and MoH and Croatian on international clinical MoH / PIU system updated including 15 health annually audit reports Public Health Institute norms, are issued by the conditions Ministry of Health. In this context, 15 refers to the total number of guidelines across the life of the project. This indicator will measure the number of sites established and providing MoH and quarterly reports. The Semi- Croatian Provision of regular MoH and Croatian Public Sentinel sites for respiratory viruses quarterly reports should annually Public Health reports Health Institute providing quarterly reports demonstrate weekly data Institute collection. Sentinel sites are
selected reporting units, with a high probability of identifying relevant disease. A detailed national or international assessment of One the surveillance system, throughout Published either through a Joint Published report on the Assessments of the surveillance system the report on the MoH / PIU External Evaluation (or MoH website conducted project's MoH website equivalent) or an lifetime independent national
report, which highlights areas of progress and areas
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
for development. Number of surveillance sites (appropriate health care facilities and/or social welfare facilities and/or Surveillance sites established for the NGOs) established for the Every 6 CIPH and surveillance of gender-related violence or surveillance of gender- Surveillance reports MoH PIU months MoH PIU domestic violence, with data collection related violence or domestic disaggregated by gender violence. Data collection will be based on a protocol informed by international norms and standards, and disaggregated by gender. The indicator will measure Monitoring reports the proportion of grievances Monitoring drawing Grievances responded to in the stipulated responded to in the Annual MoCPP, MoH. reports. on information specific time stipulated time, as defined to GRM. by the safeguards
documents. ME IO Table SPACE
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
ANNEX 1: Implementation Arrangements and Support Plan
Strategy and Approach for Implementation Support
1. Experience under previous operations has shown that, given the sensitive and challenging nature of infrastructure, emergency recovery, and recent experience from World Bank-supported COVID-19 projects, specific World Bank responsibilities require higher-than-normal supervision and support requirements, including the transfer of knowledge that the World Bank has gained in similar operations.
2. To assure timely Project implementation, the support will focus on strengthening the technical capacity and quality of implementation of the engaged line ministries. Implementation support will be provided by the World Bank team, consisting of staff with relevant competencies in operations, procurement, finance, safeguards, and technical content on DRM and seismic risk reduction for public and private infrastructure, as well as health and education. The implementation support will be adjusted as needed, in response to the evolving situation globally and in Croatia. To this end, the task team is structured in a manner that responds to the current travel restriction in place to mitigate the spread of COVID-19; much of the task team is based in the region with presence of a local staff in Zagreb. This will facilitate day-to-day operational support. In addition, implementation support will be provided in real time, through telephone and videoconferencing facilities, so that issues are identified and addressed proactively. It is foreseen that for the first six months of Project implementation, there will be limited ability to engage in field/on-site supervision. Beyond regular virtual meetings with the implementing agencies and virtual missions, field presence will be supported through local staff and engaged local experts. As allowed by security status, it is envisioned that the World Bank team will resume field implementation support missions every six months.
3. During implementation, the World Bank team will closely coordinate with the WHO, other UN agencies, and development partners in the country involved in pandemic response and earthquake reconstruction, aiming at avoiding duplications and finding possible synergies.
4. To enable the World Bank to honor its corporate commitments regarding fiduciary and safeguards responsibility, oversight and implementation support, and M&E of Project implementation, outcomes, and results, the World Bank will maintain close contact with the PIUs. Each PIU will be responsible for overall implementation of its respective components, including functions such as FM, procurement, technical inputs, quality control, and social and environmental safeguards, noting that the MoCPP PIU will carry out the procurement of civil work under Components 1 and 2. With inputs from engaged line ministries, the MoCPP PIU will prepare a biannual progress report that covers the following: (a) physical and financial progress achieved against agreed implementation and disbursement indicators; (b) issues and problem areas, including comments on actions to address identified problems; and (c) work programs and cost estimates for the coming year, including revised estimates for the former period. These will be reviewed during implementation supervision.
Implementation Support Plan
5. The Implementation Support Plan (ISP) was developed based on the specific nature of Project activities, factoring in the existing capacity of the implementing agency and the Project’s risk profile in accordance with the Systematic Operations Risk-Rating Tool, as well as the current global and country
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context with respect to the COVID-19 outbreak. This ISP reflects the assessments conducted by the World Bank during Project preparation and will be regularly reviewed and revised as required.
6. Progress review. The ISP includes frequent review of implementation performance and progress considering safety levels and regulations imposed on travel and social engagement. The World Bank team will monitor progress on several fronts, including (a) indicators as defined in the Results Framework, (b) component activities implementation, (c) independent verification of Project activities, (d) proper fiduciary management of all activities carried out by the PIUs, (e) reconciliation of payments with contracts, and (f) monitoring of compliance with key legal covenants.
7. Implementation support missions will concentrate on the overall implementation of Project activities at all levels. Field visits will serve to verify compliance with the approved POM. Support will be provided by the World Bank team, in collaboration with other experts, to ensure that activities are implemented in an efficient and cost-effective fashion in accordance with the PDO. The World Bank team will also facilitate knowledge exchange and mobilize appropriate global expertise. For both technical and fiduciary oversight and support, throughout Project implementation the World Bank will provide intense support at two points in time: during the first 12 months (from approval to effectiveness and through early implementation) and at midterm. On-site supervision will take place upon the lifting of travel restrictions due to COVID-19; virtual review will be conducted in the meantime.
8. Financial management. During Project implementation, the World Bank will supervise the Project’s FM arrangements in two main ways: (a) review the Project’s IFRs, as well as the annual audited financial statements and auditor’s management recommendation letters, and (b) perform on-site supervision (with the frequency based on the assessed Project’s risk and performance; first supervision will take place nine months after the assessment) and review the Project’s FM and disbursement arrangements to ensure compliance with the World Bank’s minimum requirements. The on-site supervision will include a review of the following areas of the Project’s FM: accounting and reporting, internal control procedures and external audits, planning and budgeting, funds flow, and staffing arrangements. A sample transactions review will also be conducted. Implementation support and supervision will be performed by the World Bank-accredited senior FM specialist. Because of the COVID- 19 pandemic, the FM supervision will shift to virtual reviews at minimum for the first six months of implementation, though field visits will be included as soon as they become feasible.
9. Procurement. The World Bank’s oversight of procurement will be done through implementation support and hands-on expanded implementation support if requested, along with increased procurement post review. The World Bank’s prior review will be minimal or will not apply as relevant. The details of the implementation support and post review arrangements will be elaborated in the PPSD once it is finalized. With regard to procurement activities, implementation support will include prior procurement reviews. The World Bank’s procurement specialist will carry out at least two missions per year to provide support to the implementation of procurement activities and as the need arises. This support will include the setup and functioning of the Procurement Plan and the implementation of procurement activities listed in the Procurement Plan. In addition to carrying out random ex post review of procurement activities, the procurement specialist may lead thematic focused missions, depending on the procurement needs and as agreed to by the ministry.
10. Safeguards. The World Bank team’s social and environmental safeguards specialists will furthermore provide technical support and oversight throughout Project implementation and will take
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responsibility for initiating the timely preparation of required safeguards instruments. Semiannual inputs from the environmental and social specialists will be required throughout the Project, and formal implementation support missions and field visits will ensure that the safeguards processes are adhered to in a fashion acceptable to the World Bank. The PIUs will receive support from the World Bank to prepare relevant environmental and social documents and instruments applicable to the Project, support the World Bank in conducting due diligence processes, and monitor the timely preparation of environmental and social assessments and management instruments. These will need to be completed and approved by the World Bank before any physical activity or works may commence in the field. The PIU will also ensure that a functioning GRM is in place and maintained for the entire Project.
11. Midterm review (MTR). The MTR will be carried out after two years of Project implementation. In preparation for the MTR, an independent review of implementation progress will be carried out, including audits. Results will provide input to any potential revisions or restructuring at the time. The MTR will cover, among others, review of the Results Framework, Systematic Operations Risk-Rating Tool, country ownership, stakeholder participation, FM, procurement processing, and sustainability aspects. The team will also review compliance with the POM.
12. Implementation Completion and Results Report (ICR). To satisfy accountability needs and provide lessons from completed operations, an ICR will be drafted by the borrower and the World Bank within six months of Project completion. ICRs are tailored to enhance development effectiveness through a continuous process of self-evaluation, lesson learning and application, knowledge sharing, and accountability for results. The lessons learned from the ICR will improve the quality and effectiveness of similar World Bank operations, while borrower/stakeholder participation in the ICR process will inform subsequent design, preparation, and implementation of future projects.
Implementation Support Plan and Resource Requirements
13. Tables 1.1 and 1.2 indicate the level of inputs and staffing that will be needed from the World Bank to provide implementation support for the proposed Project. This will be reviewed and adjusted on regular basis based on Project needs and COVID-19-related restrictions and regulations.
Table 1.1. Implementation Support Plan Skills Time Focus Partner Role Needed • Provide support for o Successful start of the Project across all • Task team to components; support smooth Technical designs, prioritization; start-up First 12 o FM system functioning; All skills • Ensure safeguards months o o Procurement; are on track o Practices on World Bank norms; and • Support the PIU o Establishment of M&E system. • Monitor implementation of Project activities. • Ensure adequate implementation support of all aspects • Ensure safeguards of the Project. are on track 12–48 • Monitor implementation of Project activities, including All skills • Support the PIU months site visits. • Provide technical • Support final evaluation and ICR. assistance
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The World Bank Croatia Earthquake Recovery and Public Health Preparedness Project (P173998)
Table 1.2. Skills Mix Required Skills Needed Number of Number of Trips Comments Staff Weeks Task team leaders 40 10 International or field-based staff Technical specialist (DRM) 75 20 International or field-based staff Technical specialist (Health) 20 4 International or field-based staff Technical specialist (Education) 20 5 International or field-based staff Technical specialist (Seismic) 25 5 International or field-based staff Technical specialist (Housing) 20 5 International or field-based staff Technical specialist (Community 20 4 International or field-based engagement and gender aspects) staff Environmental specialist 20 Local travel as needed Social specialist 20 Local travel as needed Field-based staff Economist (M&E) 10 Local travel as needed Field-based staff Procurement specialist 50 Local travel as needed Field-based staff FM specialist 20 Local travel as needed Field-based staff DRM analyst 75 Local travel as needed Field-based staff Health analyst 25 Local travel as needed Field-based staff Country office operational support 75 Local travel as needed Field-based staff Consultants for Infrastructure 50 Local travel as needed STC Consultants for Health 50 Local travel as needed STC Consultant for Safeguards 75 Local travel as needed STC Consultant for Communications 75 Local travel as needed STC Note: STC = Short-term Consultant.
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ANNEX 2: Procurement Arrangements
1. Procurement will be carried out in accordance with the World Bank’s Procurement Regulations for IPF Borrowers. The Project will be subject to the World Bank’s Anti-Corruption Guidelines, dated October 15, 2006, and revised in January 2011 and as of July 1, 2016.
2. In the context of a recent procurement assessment under a different project, the World Bank found that the public procurement system of the Republic of Croatia generally complies with the World Bank’s core procurement principles on value for money, economy, efficiency, integrity, fit for purpose, transparency, and fairness. It is fully aligned with the EU acquis. In Croatia, e-procurement is advanced and provides a good basis for further developments in transparency through further use of data, integration with other e-government solutions, and deployment of emerging technologies. Positive steps were taken with the development of the contract register, mandatory publication of public procurement plans, and the option to lodge complaints electronically. Centralized public procurement has been effectively used in the country in the last decade; there is an efficient training and certification program for public officials working in the field of public procurement, legal protection for the private sector (right to file a complaint and deadlines for complaint both procedural and administrative), and administrative oversight, as well as misdemeanor responsibility of the contracting authority in the public procurement procedure. The complaints resolution process is streamlined and the institution reviewing public procurement complaints is autonomous and independent.
3. Use of Systematic Tracking of Exchanges in Procurement (STEP). STEP will be used to plan, record, and track procurement transactions. Use of STEP is mandatory for all procurement transactions subject to post and prior review under the Project. The contracts will thus be recorded in and processed through the World Bank’s planning and tracking system, STEP. This arrangement ensures that comprehensive information—on procurement and implementation of all contracts for goods, works, non- consulting services, and consulting services awarded under the whole Project—is automatically available. This tool will be used to manage the exchange of information (such as bidding documents, bid evaluation reports, no-objections, and so on) between the implementing agencies and the World Bank. Given that the PIU is not yet appointed and that there is no procurement function, the procurement specialist will at a minimum have to be trained to use STEP as soon as he or she is recruited.
4. Planned procurement. Major planned procurement includes: (a) the reconstruction of critical infrastructure damaged in the earthquake, focused on two key sectors needed to ensure continuity of critical services, health and education), and including consulting services required for the design and supervision of such subprojects; (b) detailed engineering assessment of damaged health and education facilities; (c) immediate recovery activities, including debris removal and other activities to ensure life safety; (d) technical assistance to establish a financial support program for reconstruction of private housing; (e) supplies and equipment for public health emergencies; (f) emergency vehicles, equipment, and training to strengthen capacity to respond to public health emergencies; (g) PPE for health workers; (f) equipment and supplies for telemedicine to monitor and support patients through outbreaks; (g) repurposing equipping of selected primary health care facilities and hospitals so they can deliver critical medical services and cope with increased demand for services in the event of a health emergency; (h) support for institutional and organizational restructuring and training of staff for outbreak management activities; and (i) staff and consultant costs associated with Project implementation, coordination, and management, including fiduciary (procurement and FM) support.
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5. PPSD.25 A streamlined PPSD was prepared and a detailed PPSD will be completed during the implementation stage. The initial Procurement Plan for the Project will cover the first three months of Project implementation and will be updated during implementation. All the selection methods defined in the applicable procurement regulations can be used; however, priority will be given to streamlined and simple procedures and to those that ensure expedited delivery, such as (a) streamlined NPP; (b) direct selection; (c) request for quotations with no threshold limit, as appropriate; (d) framework agreements (including tapping into existing ones, provided the call-offs under the Project incorporate the requirement for compliance with the World Bank’s Anti-Corruption Guidelines and its prevailing sanctions, policies, and procedures as set forth in the World Bank Group’s Sanctions Framework); and (e) Selection Based on the Consultants’ Qualification. Procurement will follow either an international or a national approach in accordance with the procurement thresholds as indicated in the PPSD.
6. Procurement approach. The proposed procurement approach prioritizes fast-track procurement for the emergency goods, works, and consulting and non-consulting services needed. Key measures to fast-track procurement include (a) use of simple and fast procurement and selection methods fit for an emergency situation, including direct contracting, as appropriate; (b) streamlined competitive procedures with shorter bidding time; (c) use of framework agreements including existing ones; (d)use of procurement agents; (e) force account, as needed; and (f) increased thresholds for requests for quotations and national procurement, among others, as well as minimal or no prior review for emergency procurement. A bid-securing declaration may be asked in lieu of a bid security, performance security may not be required for small contracts, and advance payment may be increased to 40 percent if secured with the advance payment guarantee. The time for preparation of bids/proposals can be shortened to 15 business days for international competitive procedures, 7 business days for national competitive procedures, and 5 business days for the request for quotations, depending on the value and complexity of the requested scope of bid and capacity of firms (local and international) to prepare responsive bids in the proposed periods. A standstill period will not apply under the Project.
7. Retroactive financing and advance procurement may be considered under the Project, subject to the conditions set out in paragraphs 5.1 and 5.2 of the World Bank’s Procurement Regulations for IPF Borrowers. In accordance with the Procurement Regulations, the World Bank requires the application of, and compliance with, the World Bank’s Anti-Corruption Guidelines, including without limitation the World Bank’s right to sanction and the World Bank’s inspection and audit rights. To ensure compliance with the above provisions in bidding processes that have already been conducted and for which the awarded/signed contracts did not include the relevant fraud and corruption (F&C) provisions, the MoCPP and MoH have agreed to require such suppliers/consultants and contractors to sign the Letter of Acceptance of the World Bank’s Anti-Corruption Guidelines and Sanctions Framework so that these contracts can be eligible for financing under this Project; The World Bank will not finance any contracts that do not include the its F&C-related clauses. The MoCPP and MoH will also provide the World Bank with the list of contractors/suppliers and subcontractors/sub-suppliers under these contracts so that the World Bank can ensure that the firms chosen are not and were not, at the time of contract award or signing, on the World Bank’s List of Debarred Firms. Contracts awarded to firms debarred or suspended by the World Bank (or those that include debarred or suspended subcontractors/sub-suppliers) will not
25 The Guidance on the Use of streamlined Procurement Arrangements for Projects in Situations of Urgent Need of Assistance may be used while preparing the PPSD and the resultant Procurement Plan.
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be eligible for the World Bank’s financing. The specific contacts, subject to retroactive financing will be included in the Project’s Procurement Plan.
8. Procurement of secondhand goods may be considered where justified and needed to respond to an emergency. A procurement process for goods should not mix secondhand goods with new goods; the technical requirements/specifications should describe the minimum characteristics of the items that can be offered secondhand, that is, age and condition (for example, refurbished, like new, or acceptable if showing normal wear and tear); and the warranty and defect liability provisions in the contract should be written or adapted to apply to secondhand goods. Any risk mitigation measures that may be necessary in relation to the procurement and use of secondhand goods will be reflected in the PPSD.
9. The overall procurement risk rating was assessed as High before the application of the mitigation measures. After the application of the procurement risk mitigation measures, the risk was assessed Substantial. Risks to procurement are associated with the specific nature of the proposed Project. To support emergency response, country-specific projects will utilize rapid disbursement procedures and simplified procurement processes in accordance with emergency operations norms. There is a risk that qualified contractors will not be available to carry out construction works to a substantial number of sites and that rehabilitation works will need to take place at the same time. A potential fiduciary risk is failed procurement due to the lack of sufficient global supply of essential medical consumables and equipment needed to address the health emergency, as there is significant disruption in the supply chain. In addition, the implementing agency does not have experience with World Bank- financed projects, the Project management structure is not formalized yet, and a designated procurement specialist is not yet assigned to the Project. To help mitigate these risks, the implementing agencies have to ensure a clear procurement strategy. The World Bank will provide procurement guidance to the assigned procurement specialist with reference to the World Bank’s standard procurement documents, policies, and procedures.
10. Procurement oversight. The following measures would be part of the procurement oversight during Project implementation. The Procurement Plan for the Project will be created in STEP. It has to be agreed between the implementing agency and the World Bank, and no procurement may be initiated before the World Bank issues it’s no-objection to the agreed Procurement Plan. After the World Bank’s no-objection, the Procurement Plan will be automatically published on the World Bank’s external website and will become a public document. Irrespective to the review arrangement (prior or post), the relevant documents related to procurement procedures for the contracts in the agreed Procurement Plan, have to be uploaded in STEP by the designated procurement specialist in the PIU. The World Bank’s team will closely monitor the procurement process and contract implementation during Project implementation. In addition to the regular implementation support missions of the World Bank’s team, at least once a year during Project implementation, the World Bank’s procurement specialist or a third party, as relevant, would conduct a thorough post review of randomly selected sample of contracts financed under the Project.
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ANNEX 3: Health Sector
1. Improving efficiency and quality are key priorities of the Croatian health sector; hospital reconstruction will support these priorities and restore critical services that have been destroyed by the earthquake. The hospital network in Croatia has a history of being oversized and costly and its dominance of the health sector26 is a model of service delivery that is mismatched with Croatia’s epidemiological profile. Improving health care outcomes and the quality and cost of care are important objectives and they are well served through a focus on prevention and primary and community care. A strong primary care foundation enables the effective and efficient use of hospitals, where care is more expensive and specialized. Within this broad context, the earthquake has destroyed several hospital facilities and it is important that services be quickly restored. To ensure that the health sector can deliver high-quality and cost-effective care, the reconstruction will be guided by principles of sustainability and efficiency. In many respects, the technical needs of the sector would point toward a focus on financing primary health care facilities. However, two key factors mean that primary health care facilities may not be the exclusive focus of reconstruction and rehabilitation efforts. First, initial damage estimates indicate that primary health care facilities were not substantially damaged and remain functional and second, the Project focuses on publicly funded and owned health care facilities, while many primary health care facilities that are in privately owned buildings.
2. Selected investments also stand to benefit service delivery and financing, as well as build the capacity of institutions to mobilize emergency response operations. Investments have been chosen to also provide foundations for adaptive and improved service delivery. For example, telemedicine is appropriate for COVID-19 and public health outbreak response but also beneficial to primary care and integrated care27 service delivery objectives. It is not within the scope of the Project to address all institutional challenges or engage in deep sector reform, however, targeted interventions can serve as a catalyst for high-quality service delivery that is also cost-effective. In terms of emergency response, building on the results of the GHSI, the MoH, the Croatian Institute of Emergency Medicine, and the Croatian Institute of Public Health can benefit from training, technical assistance, equipment, and supplies that facilitate their ability to detect and manage public health outbreaks. This includes training to support health workers in responding to emergencies. While training will focus on logistical and operational elements to enable a coordinated and effective response, following COVID-19, it is clear that it would be beneficial to incorporate training on the transport of highly infectious patients. This type of training will help develop institutional capacity, particularly coordination between different agencies, which was identified as a gap by the GHSI.
3. The reconstruction efforts will support investments, which consider reconstruction needs and the importance of sector strategies. An example of an investment would be the reconstruction of the Croatian Public Health Institute, which plays an important role in disease surveillance and public health outbreak management. Other laboratories and parts of the public health laboratory network have not yet been identified as needing reconstruction, but will be included in capacity-building activities to develop
26 Arur and Somanathan. 2018. Hospital Arrears in Croatia from 2012 to 2016: A Health Policy and Political Economy Perspective. 27 Somanathan, Finkel, and Arur. 2019. “Strengthening Integrated Care in Central and Eastern Europe.” HNP Discussion Paper http://documents.worldbank.org/curated/en/744431582122665954/pdf/Strengthening-Integrated-Care-in-Central-and- Eastern-Europe.pdf.
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the public health surveillance and preparedness system. The Project will not seek to create excess secondary and tertiary capacity, such as increasing the number of permanent acute beds. Should additional beds for COVID-19 patients be needed, the Project would support the flexible capacity through the repurposing of other facilities or forums. For example, the Arena center in Zagreb was rapidly converted into a COVID-19 facility, much like the UK’s Nightingale Hospital in the ExCel Center in London. This approach reflects good practice and stands to be more effective and financial sustainable, particularly given that Croatia has demonstrated the capability to mobilize these facilities at pace.
4. Hospital reconstruction efforts in Component 1 would likely break ground in mid-2021, and to ensure alignment with longer-term strategic goals, investment selection will be guided by the criteria in table 3.1. These proposals are based on early dialogue and initial assessments, using the criteria, and focus on the consolidation of services around the Rebro Campus of University Clinical Center Zagreb, and rehabilitation of selected buildings within the Clinic for Infectious Diseases (Dr. Fran Mihaljević). Table 3.1 provides an illustration of activities that have the potential to meet the criteria; however, these do not constitute a final list or commitment.
Table 3.1. Indicative Long List of Facilities for Potential Reconstruction and Rehabilitation
Summary of Relevant Facilities and Reconstruction and Rationale Details Strategic Activity These two service lines are currently not colocated with Relocating • Dermatology Clinic, other surgical and nonsurgical specialties. Bringing dermatology and Clinical Hospital Center these two service lines into the Rebro Campus will orthopedics alongside Zagreb remove the need for duplicative auxiliary services and other surgical and • Orthopedics Clinic, open up possibilities of these two service lines nonsurgical Clinical Hospital Center benefiting from closer proximity to other surgical and specialties Zagreb non-surgical services. • Clinic for Pulmonary Diseases Jordanovac, Restoring capacity for Clinical Hospital Center Given the demands of COVID-19 and similar diseases, the treatment of Zagreb this reconstruction has the potential to improve clinical respiratory diseases • University Hospital for outcomes. and infectious disease Infectious Diseases Dr. Fran Mihaljevic Reconstructing these facilities is necessary to ensure Restoring capacity for • Clinic for Children’s that health care outcomes for children are not pediatric care Diseases Zagreb compromised.
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ANNEX 4: Education Sector
1. COVID-19 has had a profound impact on the education sector. On March 16, all education institutions in the country were closed, and students at all levels were asked to learn from home. Because of recent investments in digitizing the sector, which focused in part on improving students’ and teachers’ digital competence and on equipping education facilities, the MoSE was able to successfully launch distance learning for primary and secondary students in only two weeks and was also able to support efforts by higher education institutions to move their lectures online.
2. Distance learning was slated to end gradually, with students in grades 1–4 returning to education facilities in Zagreb on May 11, but the earthquake has had a significant impact on plans to reopen Zagreb education facilities. According to an assessment by the University of Zagreb, 232 education and research facilities were damaged within the City of Zagreb, Zagreb County, and Krapinsko- Zagorska County (which have a total of 361 elementary and 102 secondary schools). In terms of the biggest disruptions, 4 schools were totally destroyed and another 17 need major structural repairs to be usable again. Fortunately, when the earthquake hit, all institutions were closed, and as a result, no students were injured. Nonetheless, the event rendered many buildings unsafe for future use. The MoSE’s plan to gradually reopen education facilities in May has been derailed by the impact of the earthquake, and not all schools will be able to reopen. Overall, there are 142,000 primary and secondary students enrolled in schools in the three counties that suffered earthquake damage. Approximately 10,000 of these students are enrolled in the 21 education facilities that have been either totally destroyed or significantly damaged by the earthquake.
Table 4.1. Initial Details of Education Facilities Damaged in Earthquake
Croatia City of Zagreb, Zagreb County, and Krapinsko-Zagorska County Moderate/Minor Total Major Damage No Damage Damage Basic education Number of facilities 2,065 10 77 48 Number of students 319,000 4,623 93,042 Upper secondary schools Number of facilities 401 11 33 28 Number of students 146,000 4,890 39,102 Others Kindergartens 1,710 4 24 198 Othersa 73 Note: a. Breakdown by damage category and type of facility not yet available.
3. In addition to elementary and secondary schools, a large number of other education facilities, including kindergartens, tertiary education institutions, and public research institutes, suffered damage. It is particularly worrisome that the earthquake damaged 28 kindergartens, 4 of them severely, given that Croatia has one of Europe’s lowest rates of kindergarten attendance, in large part due to the lack of available spaces in such institutions. Only 51 percent of children ages three to six attend some form
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of preprimary education, compared to 86 percent of children in the EU. Higher education and research sectors were also profoundly affected by the earthquake: 50 higher education buildings and 23 research institutes were damaged. The University of Zagreb, which is among the most severely affected institutions, has over 60,000 students, and many of them have been directly affected by the earthquake.
Box 4.1. The Education Sector in Brief The education sector is characterized by high attainment levels. Almost all children enroll in grade 1, and virtually all of them complete all eight years of basic education. There are typically no dropouts, and repetition rates are also very low. The eight years of basic education prepare students well for Croatia’s upper secondary education: youth in Croatia are more likely to complete upper secondary education or higher than youth in any other European country. In 2019, an impressive 97.3 percent of Croatia’s 20- to 24-year-olds reported having completed upper secondary education or higher, compared to an average of 78.4 percent across the EU. At the same time, concerns remain about students’ poor problem-solving skills. The performance of Croatian students in collaborative problem solving is one of the lowest among participating countries in international assessments of such skills. In a recent assessment of the problem-solving skills of 15-year-olds (enrolled in either the last year of basic education or the first year of upper secondary education), Croatia was placed 43 out of 50. The MoSE has launched a first wave of reforms aimed at improving students’ problem-solving skills and is working with the World Bank to launch broader reforms. This year, after years of discussion and preparation, all schools were introduced to a new curriculum that places more emphasis on problem-solving skills. The MoSE has also been in discussions with the World Bank on launching a second broader set of reforms, including (a) introducing longer school days and (b) providing better incentives for local authorities to downsize their school networks.
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ANNEX 5: Disaster Profile and Climate Change Screening
1. Croatia is among the countries in the Europe and Central Asia region with the highest risk to well-being from the impact of natural disasters. The level of risk considers a combination of hazard, exposure, asset vulnerability, and socioeconomic resilience. Croatia is exposed to a range of natural hazards such as floods, wildfires, earthquakes, extreme temperatures, strong winds, and drought. Croatia’s coastal zone is affected by storms, cyclones, and intense bora winds. Inland, Croatia is subject to strong convective events and locally arising storms that bring hail, wind, and heavy precipitation, which can cause flooding of important areas such as Zagreb. In its mountain zone, Croatia is subject to severe snowstorms.
2. About 30 percent of the country’s territory—an area that is home to about 60 percent of the population28 and that produces about 65 percent of the country’s GDP29—is exposed to earthquakes. Flooding threatens more than 15 percent of the country’s inland territory,30 where 31 percent of the population lives and 26 percent of GDP is produced.31 According to the World Bank, floods cause damage of about €19.8 million a year on average.32 Flooding in 2014 killed three people and affected over 9,000. Drought damages in Croatia are highest in the Mediterranean region and East Croatia.33 In 2003, drought caused economic damage of more than US$300 million, and severe droughts also occurred in 2012.
3. Wildfires occur throughout Croatia mainly during dry periods; in coastal areas they occur mainly during the summer. In addition to the 2017 wildfire season, which was particularly devastating, Croatia has seen significant wildfire damage over the last two decades. In Dubrovnik, the wildfire of August 2007 destroyed more than 3,400 ha of vegetation and caused monetary damage to firefighting equipment of over €140,000, making it one of the worst fires in Southeastern Europe in recent decades. Croatia is also exposed to extreme temperatures (both heat and cold waves). The 2019 heat wave brought temperatures in excess of 40°C. Milder forms of heat waves occur regularly in the Western Balkans (2002, 2003, 2004, 2007, and 2010), whereas extreme heat waves are rare. In 2000, a severe heat wave affected the Zagreb, Split, Osijek, and Rijeka areas of Croatia, killing 40 and injuring 200 people.34 Extreme temperatures also affected Croatia in 2003 (killing 788 people) and 2005 (killing 5 people).35
28 Croatian Crisis Management Association, http://hukm.hr/wp-content/uploads/2017/10/EMSN039-Final_Report.pdf. 29 UNDP (United Nations Development Programme). 2016. Risk-Proofing the Western Balkans: Empowering People to Prevent Disasters. Human Development Report. 30 Croatian Crisis Management Association, http://hukm.hr/wp-content/uploads/2017/10/EMSN039-Final_Report.pdf. 31 UNDP. 2016. Risk-Proofing the Western Balkans: Empowering People to Prevent Disasters. Human Development Report 2016. 32 World Bank, ISDR (International Strategy for Disaster Reduction), WMO (World Meteorological Organization), and Finnish Meteorological Institute. 2008. “Strengthening Hydrometeorological Services in South Eastern Europe: South Eastern Europe Disaster Risk Mitigation and Adaptation Programme.” 33 World Meteorological Organization, et al. 2012. “Meteorological, Hydrological and Climate Services to Support Disaster Risk Reduction and Early Warning Systems in Croatia.” Chapter 4 in Strengthening Multi-Hazard Early Warning Systems and Risk Assessment in the Western Balkans and Turkey: Assessment of Capacities, Gaps and Needs. Geneva: World Meteorological Organization, Regional Office for Europe, 2012. 34 UNDP. 2016. Risk-Proofing the Western Balkans: Empowering People to Prevent Disasters. Human Development Report. 35 European Commission. “Croatia—List of Emergencies; Vademecum—Civil Protection.” https://ec.europa.eu/echo/files/civil_protection/vademecum/hr/2-hr-6.html.
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4. The total economic loss related to earthquakes can be estimated at US$101.8 million annually (see figure 5.1), based on Global Earthquake Model analysis. Significant past events include the Dubrovnik earthquake in 1667, which is estimated to have destroyed 5,000 homes and caused 3,000 deaths36 and the 1979 Dubrovnik earthquake, which affected about 1,000 buildings. The 1880 Great Zagreb earthquake (M6.2) caused the destruction of 13 percent of buildings and affected virtually every building in Zagreb, while all masonry buildings were destroyed in villages such as Planina, Cučerje, Vugrovec, and Kašina.
Table 5.1. Predicted Average Annual Losses (left) and Average Annual Loss Ratios (right) Caused by Earthquakes in Croatia
Source: Global Earthquake Model (GEM), https://downloads.openquake.org/countryprofiles/. © GEM; licensed under Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0).
Climate Change
5. Climate change in Croatia could significantly increase the frequency and severity of weather- related disasters, which occur more often than any other type of disaster in the country. Looking forward, all across Croatia, decreasing precipitation and rising average temperature are predicted. The increase of mean annual air temperature in the 20th century varied between 0.02°C per 10 years (Gospić) and 0.07°C per 10 years (Zagreb). The frequency of dry spells—that is, the number of consecutive dry days —has also risen in the past years. Of the 10 warmest years since the beginning of the 20th century, 7 were recorded after the year 2000, with 2016 being the warmest year ever recorded. Dry spells contribute to the risk of wildfires, which in recent years have been particularly dangerous along the Adriatic coast; in 2007 alone, for example 2,700 wildfires were reported. Increasing temperatures and declining precipitation bring an increased risk of droughts, which adds to the risk of forest fires.
36 If the same event were to occur today, then the damage to current exposures is estimated to be around US$7 billion. Daniell, J., and A. Schaefer, “Eastern Europe and Central Asia Region Earthquake Risk Assessment Country and Province Profiling.” Global Facility for Disaster Reduction and Recovery/World Bank, 2014.
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6. Climate change and its impact could affect a number of economic sectors in Croatia. For instance, the energy sector is potentially vulnerable if climate change results in more frequently reduced river flows, as predicted by climate models simulating a drier Croatia. A likely scenario for the future is a direct loss of between €16 million and €82 million annually, with multiplier effects throughout the economy.37 The impact from extreme weather on agriculture is expected to be significant because of the vulnerability of agriculture to climate conditions, including increases in temperatures and decreases in precipitation. Most crops in the region depend on rainfall because of very limited irrigation and storage capacities. Agriculture is important to the economy of Croatia due to its overall value and its impact on food security, vulnerable populations, and the employment it generates. Generally, rural households are more vulnerable than households in urban areas due to poorer access to basic infrastructure and poorer housing conditions. Existing climate variability already has had a significant impact on agriculture. Looking at the future effect on maize alone, the lost revenue due to climate change is estimated at about €6–16 million in 2050 and €31–43 million in 2100. These figures correspond to 0.8–5.7 percent of all revenue from arable crop sales in Croatia in 2005. Most of this damage would be due to a water shortage during critical phases, as well as flooding and hailstorms, which also cause damage. Critical years such as 2003 and 2007 showed huge economic damage that was difficult to recover from.38
37 World Meteorological Organization, et al. 2012. “Meteorological, Hydrological and Climate Services to Support Disaster Risk Reduction and Early Warning Systems in Croatia,” Chapter 4 in Strengthening Multi-Hazard Early Warning Systems and Risk Assessment in the Western Balkans and Turkey: Assessment of Capacities, Gaps and Needs. Geneva: World Meteorological Organization, Regional Office for Europe. 38 World Meteorological Organization et al. 2012.
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ANNEX 6: Earthquake Event Description and Damage Information
1. An earthquake of magnitude (Mw) 5.4, focal depth of less than 10 km, occurred at 06:24 hours local time on Sunday, March 22, 2020, with an epicenter 7 km north of the city center of the capital, Zagreb. Several aftershocks occurred, the most significant of which measured Mw 5 and occurred on the same day at 07:01 hours, with an epicenter very close to that of the main shock. The maximum felt intensity from the main shock was reported as VII–VIII on the Mercalli–Cancani–Sieberg (MCS) Macroseismic Intensity Scale (strong shaking).39
2. Ground shaking (figure 6.1) resulted in building damage that affected the health, education, and housing sectors and damaged several historic buildings in the Zagreb city center, along with some critical facilities/lifelines. A nuclear power plant across the border with Slovenia experienced shaking but has not reported any damage. In addition to Zagreb, nine towns or villages in Zagrebačka County and Krapina-Zagorje County have been significantly affected. The strongest reported impact was in Kašina.40
Figure 6.1. Ground Shaking Intensity Map for the Main Shock
Source: D-RAS, World Bank/Global Facility for Disaster Reduction and Recovery.
3. The March 2020 earthquake resulted in one fatality, 26 injuries, and the displacement of hundreds of people. In the aftermath of the earthquake, 291 people were housed in an evacuation center, and an unknown number were housed with friends and relatives. Initial reports in March 2020 stated that some 26,000 buildings were damaged, of which 1,900 were categorized as uninhabitable. There was damage to (a) 63 educational facilities—including 23 primary schools, 2 secondary schools, 20
39 Global Rapid post-disaster Damage Estimation (GRADE) Briefing Note, Zagreb-Croatia Earthquake of 22 March 2020. World Bank/Global Facility for Disaster Reduction and Recovery Disaster Resilience Analytics and Solutions (D-RAS) Team, (March 27, 2020). 40 GRADE Briefing Note, Zagreb-Croatia Earthquake of 22 March 2020. World Bank/Global Facility for Disaster Reduction and Recovery Disaster Resilience Analytics and Solutions (D-RAS) Team, (March 27, 2020).
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faculty buildings (of universities), and 18 research institutes; (b) to seven health facilities; 41 and (c) to several historic buildings with cultural heritage value, including the national parliament building and museums, theaters, and churches. In Zagreb’s Donji grad district, most of the brick or wooden structures —many of them with aged heating systems, obsolete chimneys, and gas boilers—were damaged.
4. Since the event, the Faculty of Civil Engineering of the University of Zagreb has been conducting an RDNA with the support of volunteers, the private sector, and academia. The methodology draws on Italy’s AeDES approach, adjusting for local specificities, and with less detail. Volunteers are using a geographic information system-based application. The usability assessment has six grades: (a) green U1 (safe for use without limitations); (b) green U2 (safe for use, but with suggested short-term countermeasures, such as removal of a collapsed chimney); (c) orange/yellow PN1 (temporarily unusable and requiring more detailed investigation); (d) orange/yellow PN2 (temporarily unusable and requiring short-term countermeasures); (e) red N1 (unusable building because of external risks); and (f) red N2 (unusable building because of damage). Related to the classification of buildings, damage severity is considered as none, slight, moderate, or severe; these ratings guide the preliminary assessment categories (with two subcategories each): usable (green color), temporarily usable (orange color), and unusable (red color). As of April 30, 2020, 16,089 buildings had been assessed in total, of which 849 were considered unusable.42 Damage to buildings per city area (as of April 10) is summarized in table 6.1.
Table 6.1. Damaged Buildings (as of April 10, 2020) Number of Number of Number of Buildings Number of Total Buildings Requests Received Assessed - Buildings per City Area Number of Assessed - for Building Deemed Requests - Not Buildings Deemed Assessment Temporarily Yet Reviewed Unusable Unusable Donji grad 4,174 1,816 104 473 592 Gornji grad 10,139 2,182 72 399 1,117 Medvescak Trnje 6,708 638 15 339 471 Maksimir 15,514 2,530 48 30 1,879 Pescenica - Zitnjak 20,940 479 1 177 428 Novi Zagreb - east 5,347 256 0 12 202 Novi Zagreb - west 24,248 205 0 4 177 Tresnjevka - north 12,447 967 4 24 810 Tresnjevka - south 7,052 289 1 4 244 Crnomerec 17,657 954 5 55 767 Gornja Dubrava 28,892 2,461 70 165 1,840 Donja Dubrava 15,996 376 2 12 336 Stenjevec 9,649 152 1 0 140 Podsused - Vrapce 20,666 376 3 14 321 Podsljeme 13,321 1,826 70 229 961 Sesvete 46,072 1,117 8 27 959
41 The seven are Vinogradskoj Hospital’s Ophthalmological Clinic, Rebra Hospital, Petrova Hospital’s Maternity Clinic, the Emergency Medicine Institute hospital complex in Klaićeva, the Infectious Diseases Clinic (Dr. Fran Mihaljevic), the Pulmonary Clinic in Jordanovac, and the orthopedic and dermatology buildings in Šalati. 42 https://www.hcpi.hr/sto-dalje.
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Number of Number of Number of Buildings Number of Total Buildings Requests Received Assessed - Buildings per City Area Number of Assessed - for Building Deemed Requests - Not Buildings Deemed Assessment Temporarily Yet Reviewed Unusable Unusable Brezovica 15,062 8 0 0 8 City of Zagreb 273,884 16,632 404 1,569 11,252
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ANNEX 7: Country Map
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